Two Sigma's new CEOs face problems, including Gen Z's interpretation of its name
Hedge fund Two Sigma has attempted to put one of its problems behind it: its feuding founders, David Siegel and John Overdeck, are becoming co-chairmen instead. Their co-CEO roles are going to Carter Lyons, Two Sigma's long serving chief business officer, and to Scott Hoffman, Lazard's former general counsel.
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The solution seems peculiar. It's not entirely clear how Two Sigma's army of quants and modellers will feel about being managed by an ex-investor relations guy (Lyons) and an ex-lawyer (Hoffman). Siegel and Overdeck are both archetypal quants. - Overdeck was a math prodigy from a young age; he's won Olympiads and has an MS in statistics from Stanford. Siegel was building a supercomputer aged 12.
Until recently, Overdeck reportedly managed Two Sigma's modellers while Siegel managed Two Sigma's engineers, with the two groups operating as semi-separate fiefdoms while their leaders disagreed on everything from their own roles and pay to team structure and responsibilities. In the future, Two Sigma says the two crotchety co-founders will take a back seat. They’ll “step away” from day-to-day management, but will “lend” their “deep quantitative investment and technology expertise” as necessary.
Something needed to be done. In March, Two Sigma said the rift between its founders was disturbing its ability to hire and retain senior talent. However, given that top quants may not exactly rush to work for Lyons or Hoffman, Two Sigma's status as a talent magnet will now depend upon the appeal of the tier of managers below them. These include: Ali-Milan Nekmouche, Two Sigma's CIO for equities who's succeeding Overdeck as CIO for Two Sigma Investments; Jeff Wecker, the CTO; Geoff Duncombe, the CIO for Two Sigma Advisers and for macro; and Tim Reynolds, the COO.
Bloomberg notes that the firms assets are split between Two Sigma Investments and Two Sigma Advisers, making Nekmouche and Wecker the real powers behind the throne.
While Two Sigma attempts to solve the issues of its org chart, though, the quant fund may have a problem of a different nature when it comes to attracting juniors. - Members of Gen Z can't get past its name.
For Gen Z, Sigma is associated with "Sigma males." Depending upon who you ask, these are either icons of misogynism and toxic masculinity, or rare men who are happy to work alone and think outside the box. Last year, videos about Sigma males received 46 billion views on TikTok.
While working for a company that seems to espouse the Sigma values might not dissuade young men from joining Two Sigma, the fund probably needs to think very hard about its pitch to women. It probably doesn't help that all the senior managers there are male.
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