Bickering hedge fund billionaires quit as co-CEOs of Two Sigma

Two bickering billionaire founders of a top hedge fund agreed to step down on Wednesday, potentially ending one of the most long-running boardroom spats on Wall Street.

John Overdeck and David Siegel, who set up Two Sigma in 2001, are handing over the reins to two new co-CEOs after a years-long feud over the direction of a firm that manages $60 billion in assets and employs AI as part of its trading strategy.

The bad blood between Overdeck, 54, and Siegel, 63, turned so toxic that the usually secretive firm warned that their strained relationship was a “material risk” that could hurt the company’s prospects, according to a March 2024 regulatory filing.

Two Sigma said at the time it was experiencing “a variety of management and governance challenges,” and the management committee has “been unable to reach agreement on a number of topics.”

The dustup was also affecting Two Sigma’s “ability to retain and attract employees (including very senior employees),” the firm said in the filing.

Overdeck, a mathematician who worked for Jeff Bezos in Amazon’s early days, and Siegel are barely on speaking terms after reportedly disagreeing on the direction and strategy for the company.

Despite their differences, Overdeck and Siegel will move upstairs and stay on as co-chairmen to advise on quant investing and technology.

Two Sigma said its chief business officer Carter Lyons, a 13-year-veteran of the firm, and former Lazard general counsel Scott Hoffman will take over as the new joint chief executives on Sept. 30.

“Over the past year and a half, we and our senior management team have dedicated significant effort to securing the long-term success and stability of Two Sigma,” Overdeck and Siegel wrote in a letter to investors. “Throughout this process, our own roles have been a central consideration.”

“Today, we are confident that stepping back from our day-to-day management roles is the right decision at this time,” they wrote.

In a separate statement released to the media, Overdeck added: We are very grateful for the trust our investors have placed in us over our first 23 years.”

He said he had “full confidence” in Lyons and Hoffman as “they guide the firm forward.”

Each of the men have a personal net worth of about $6.2 billion, according to the Bloomberg Billionaires Index.

The firm’s assets are split between two separate entities: Two Sigma Investments and Two Sigma Advisers.

Overdeck will also leave his role as as chief investment officer of the former to be replaced by Ali-Milan Nekmouche, while Geoff Duncombe will stay on as chief investment officer of Two Sigma Advisers.

Overdeck first met Siegel when the two were working at another hedge fund, D.E. Shaw, in the 1990s before setting up Two Sigma.

The company employs approximately 2,000 people globally, two-thirds of whom are in research and development roles.

Two Sigma’s Absolute Return Enhanced Fund gained 10.6% in the first half of the year, while its flagship Spectrum Fund rose 6.1%, Bloomberg reported on Wednesday.