Sigma founders step down as co-CEOs after years of feud
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The founders of Two Sigma, one of the world’s largest hedge funds, are stepping down as co-chief executives of the firm they built into a quantitative trading giant after years of disagreement over how to run the company.
Two Sigma said Wednesday that John Overdeck and David Siegel will step down at the end of September.
The mathematician and computer scientist will be replaced as co-CEO by the company’s chief business officer, Carter Lyons, and former general counsel at investment bank Lazard, Scott Hoffman.
While Overdeck and Siegel are relinquishing their day-to-day management responsibilities, they will continue to advise on quantitative investing and technology as co-chairs. The pair founded the hedge fund, which now manages $60 billion in assets, more than two decades ago after working at DE Shaw.
The internal fighting between Overdeck and Siegel was exposed last year when hedge fund took the unusual step of revealing that disagreements among board members — including Overdeck and Siegel — could amount to “significant risk.”
“These disagreements can affect [Two Sigma’s] ability to retain or attract employees (including very senior employees) and may continue to impact the ability of employees to fully implement the company’s important research, technical or business initiatives,” the filing said.
The committee could not agree on the organizational structure, responsibilities of senior executives including the chief investment officer and succession planning.
“Our vision has always been to build a sustainable organization driven by a systematic investment process, a commitment to investing in our people and our platform, and a growth mindset,” Siegel said on Wednesday.
“With their extensive experience, complementary expertise and appreciation for Two Sigma’s unique culture, Carter and Scott will continue this vision, taking the company to new heights,” he added.
Quantitative trading has become one of the most lucrative strategies among hedge funds, with giants like Two Sigma luring investors with cutting-edge technology and investment methods. Overdeck and Siegel helped pioneer the strategy.
“We are grateful for the trust our investors have shown us over our first 23 years and have full confidence in Carter, Scott and our strong and deep leadership team as they lead the company forward,” Overdeck said.
