Key Takeaways
- • Two Sigma, one of the world's largest hedge funds, said on Wednesday, August 28, 2024, that co-founders John Overdeck and David Siegel will step down as co-chief executives after a long, public feud.
- • Carter Lyons, the fund's chief business officer, and Scott Hoffman, a former chief administrative officer and general counsel of Lazard, will become the new co-chief executives effective Sept. 30.
- • Ali-Milan Nekmouche will expand his role to include chief investment officer, succeeding Mr. Overdeck, as part of several management changes.
- • Two Sigma, which recently managed around $60 billion in assets, created a redemption extension until Sept. 18, according to a person familiar with the terms.
- • The founders' estimated net worth is $7 billion each per Forbes, and the firm faces regulatory scrutiny over an employee's alteration of trading models disclosed in October 2023.
Summary
Two Sigma, one of the world's largest hedge funds, said on Wednesday that its billionaire co-founders, John Overdeck and David Siegel, would step down as co-chief executives, according to The New York Times. The two men founded the multibillion-dollar firm in 2001 and have been engaged in a long, bitter feud that has spilled into public view. The firm, once known for its commitment to secrecy, warned in regulatory filings last year that the relationship between the men had become so toxic that it could hurt the firm's prospects.
The firm named Carter Lyons, its chief business officer, and Scott Hoffman, a former chief administrative officer and general counsel of Lazard, as new co-chief executives. Both will take over on Sept. 30, according to a letter to investors viewed by The Times. In that letter, Mr. Overdeck and Mr. Siegel wrote that over the past year and a half they "have dedicated significant effort to securing the long-term success and stability of Two Sigma." Ali-Milan Nekmouche will expand his existing role to include chief investment officer, succeeding Mr. Overdeck.
The Times reported it is unclear whether the announcements will quell concerns about the firm's future or ease tensions within it. Investors were given an extension to redeem their investments until Sept. 18, according to a person familiar with the terms. Redemptions at Two Sigma are typically permitted only every few months or quarters, depending on the fund, and the window for end-September redemptions would otherwise have already closed. Two Sigma, which recently managed around $60 billion in assets, built its business around sophisticated, in-house algorithms. Former employees said the founders' strained relationship, in which they barely spoke, had made straightforward decisions difficult.
Forbes estimates each founder's net worth at $7 billion. The feud has also spilled into other areas: Mr. Overdeck was the target of a lawsuit by his wife, who alleged that he and the couple's lawyers moved billions of dollars of joint assets into trusts meant to shield them from her, their three children and the Internal Revenue Service. The couple is in the process of divorcing. In October, the firm told investors that an employee had altered some trading models without the firm's knowledge, affecting its returns and drawing regulatory scrutiny.
The firm named Carter Lyons, its chief business officer, and Scott Hoffman, a former chief administrative officer and general counsel of Lazard, as new co-chief executives. Both will take over on Sept. 30, according to a letter to investors viewed by The Times. In that letter, Mr. Overdeck and Mr. Siegel wrote that over the past year and a half they "have dedicated significant effort to securing the long-term success and stability of Two Sigma." Ali-Milan Nekmouche will expand his existing role to include chief investment officer, succeeding Mr. Overdeck.
The Times reported it is unclear whether the announcements will quell concerns about the firm's future or ease tensions within it. Investors were given an extension to redeem their investments until Sept. 18, according to a person familiar with the terms. Redemptions at Two Sigma are typically permitted only every few months or quarters, depending on the fund, and the window for end-September redemptions would otherwise have already closed. Two Sigma, which recently managed around $60 billion in assets, built its business around sophisticated, in-house algorithms. Former employees said the founders' strained relationship, in which they barely spoke, had made straightforward decisions difficult.
Forbes estimates each founder's net worth at $7 billion. The feud has also spilled into other areas: Mr. Overdeck was the target of a lawsuit by his wife, who alleged that he and the couple's lawyers moved billions of dollars of joint assets into trusts meant to shield them from her, their three children and the Internal Revenue Service. The couple is in the process of divorcing. In October, the firm told investors that an employee had altered some trading models without the firm's knowledge, affecting its returns and drawing regulatory scrutiny.
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