The two bickering billionaire founders of a major hedge fund agreed to step down Wednesday, potentially bringing to an end one of Wall Street's longest-running boardroom disputes.
John Overdeck and David Siegel, who founded Two Sigma in 2001, are handing over control to two new co-CEOs after years of feuding over the direction of the company, which manages $60 billion in assets and employs AI as part of its trading strategies.
The rift between Mr. Overdeck, 54, and Mr. Siegel, 63, had worsened enough for the normally secretive company to warn that their strained relationship was a “significant risk” that could negatively affect the company's future, the company said. Regulatory filing in March 2024.
Two Sigma said at the time that it was experiencing “a variety of management and governance challenges” and that its management committee was “unable to reach agreement on a number of issues.”
The turmoil has also affected Two Sigma's “ability to retain and attract employees, including senior-level employees,” the company said in the filing.
Overdeck and Siegel, mathematicians who worked for Jeff Bezos in Amazon's early days, Report of opposition About the company's direction and strategy.
Despite their differences, Overdeck and Siegel will move into senior roles and remain as co-chairmen, advising on quantitative investing and technology.
Two Sigma announced that Carter Lyons, a 13-year veteran of the company and chief operating officer, and Scott Hoffman, a former general counsel at Lazard & Co., will become its new co-chief executive officers, effective September 30.
“Over the past year and a half, we and our senior management team have focused significant efforts on ensuring the long-term success and stability of Two Sigma,” Overdeck and Siegel wrote in their letter to investors. “Throughout this process, our own role has been a central consideration.”
“Today, we believe that stepping back from day-to-day management roles is the right decision at this time,” they wrote.
In a separate statement released to the media, Overdeck added that it “extremely appreciates the confidence our investors have placed in our company over our first 23 years.”
He said he had “full confidence” in Lyons and Hoffman to “lead the company forward.”
The three men each have a personal net worth of about $6.2 billion, according to the Bloomberg Billionaires Index.
The company's assets are split into two separate entities: Two Sigma Investments and Two Sigma Advisers.
Overdeck will also step down as chief investment officer of Two Sigma Advisors and be replaced by Ali Milan Nekhmoush, while Jeff Duncomb will remain in his role as chief investment officer at Two Sigma Advisors.
Mr. Overdeck first met Mr. Siegel in the 1990s, before he founded Two Sigma, when the two were both working at another hedge fund, D.E. Shaw.
The company employs around 2,000 people worldwide, two-thirds of whom work in research and development.
Two Sigma's Absolute Return Enhanced fund rose 10.6% in the first half of the year, while its flagship Spectrum fund rose 6.1%, Bloomberg reported Wednesday.
