  It is a challenge to estimate fund performance by compounded returns.
Arguably, it is incorrect to use yearly returns directly for compounding, with
reported annualized return of above 60% for Medallion for the 31 years up to
2018. We propose an estimation based on fund sizes and trading profits and
obtain a compounded return of 32.6% before fees with a 3% financing rate.
Alternatively, we suggest using the manager's wealth as a proxy and arriving at
a compounded growth rate of 25.6% for Simons for the 33 years up to 2020. We
conclude that the annualized compounded return of Medallion before fees is
probably under 35%. Our findings have implications for how to compute fund
performance correctly.
