Two Sigma founders step down as co-CEOs after years of acrimony

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The founders of Two Sigma, one of the world’s largest hedge funds, are stepping down as chief executives of the company they built into a quant trading giant after years of clashing over how should be managed.

John Overdeck and David Siegel will step down at the end of September, Two Sigma announced Wednesday.

The mathematician and computer scientist will be replaced as co-chief executives by the company’s chief business officer, Carter Lyons, and former Lazard investment bank general counsel Scott Hoffman.

While Overdeck and Siegel are relinquishing their day-to-day management responsibilities, they will continue to provide quantitative and technology investment advice as co-chairs. The pair founded the hedge fund, which today manages $60 billion in assets, more than two decades ago after working at DE Shaw.

The struggles between Overdeck and Siegel were revealed last year when the hedge fund made the unusual move of disclosing that disagreements between members of the management committee – which includes Overdeck and Siegel – could pose a “material risk”.

“These disagreements may affect (Two Sigma’s) ability to retain or attract employees (including very senior employees) and could continue to affect employees’ ability to fully implement key research, engineering or corporate business initiatives,” it said. file.

The Committee was unable to agree on organizational structure, responsibilities for senior executives, including investment directors, and succession plans.

“Our vision has always been to build a sustainable organization driven by a systematic investment process, a commitment to investing in our people and platform, and an evolution mindset,” Siegel said Wednesday.

“With their vast experience, complementary expertise and appreciation for Two Sigma’s unique culture, Carter and Scott will carry this vision forward, guiding the firm to even greater heights,” he added.

Quant trading has become one of the most profitable strategies among hedge funds, with giants like Two Sigma attracting investors with cutting-edge technologies and investment methods. Overdeck and Siegel helped create the strategy.

“We are very grateful for the trust our investors have placed in us over our first 23 years, and we have complete confidence in Carter, Scott and our strong and deep leadership as they lead the company forward,” Overdeck said.