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Co-founder rift poses “material risk” for Two Sigma clients

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A rift between the co-founders of New York-based hedge fund Two Sigma Investments over the firm’s organisation and succession plan, as well as a host of other disputes, could pose a risk to the firm and its clients, according to a report by the Wall Street Journal.

A rift between the co-founders of New York-based hedge fund Two Sigma Investments over the firm’s organisation and succession plan, as well as a host of other disputes, could pose a risk to the firm and its clients, according to a report by the Wall Street Journal.

Differences of opinion between John Overdeck and David Siegel, who founded the quantitative hedge fund in 2001, became so fraught that the firm cited their strained relationship as a “material risk” in a 31 March regulatory filing.

“If such disagreement were to continue, the adviser’s ability to achieve client mandates could be impacted over time,” Two Sigma, which has between $60 billion and $70 billion in assets under management, wrote in the filing, adding that the rift is already impacting the implementation of key research, engineering and corporate business initiatives by staff.

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