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.
Mr. Overdeck and Mr. Siegel, who founded the multibillion-dollar firm in 2001, have been engaged in a long, bitter feud that has spilled into public view. Last year, the firm — once known for its commitment to secrecy — warned in regulatory filings that the relationship between the men had turned so toxic that it could hurt the firm’s prospects.
On Wednesday, Two Sigma also announced new co-chief executives: Carter Lyons, who currently serves as the fund’s chief business officer, and Scott Hoffman, the former chief administrative officer and general counsel of Lazard.
In a letter to investors viewed by The New York Times, Mr. Overdeck and Mr. Siegel wrote that in the past year and a half, they “have dedicated significant effort to securing the long-term success and stability of Two Sigma.”
The new chief executives would take over on Sept. 30, the letter said. Two Sigma announced several other management changes, including one for Ali-Milan Nekmouche, who will expand his existing role at the fund to include chief investment officer, succeeding Mr. Overdeck.
It’s unclear whether these announcements will quell concerns about the firm’s future or ease tensions inside it. As part of the changes, Two Sigma told investors that they have created an extension to give them the option to redeem their investments until Sept. 18, according to a person familiar with the terms. Investors in Two Sigma can only redeem every few months or quarters, which varies by the particular fund, the person said. The window for investors to redeem money at the end of September would have otherwise already closed.
Two Sigma, which recently managed around $60 billion in assets, built its business around sophisticated, in-house algorithms that powered its trading.
The relationship between Mr. Overdeck and Mr. Siegel had become so fraught that they barely spoke to one another. Former employees said that because of this, it had became difficult to make straightforward decisions at the firm.
Mr. Overdeck and Mr. Siegel have an estimated net worth of roughly $7 billion each, according to Forbes. The feud between the founders wasn’t the only issue to spill into public view recently.
Mr. Overdeck was the target of a lawsuit by his wife who said that he and the couple’s lawyers had moved billions of dollars of their joint assets into trusts that would shield them from her, their three children and the Internal Revenue Service. The couple is in the process of getting a divorce.
And last 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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