00:00Two Sigma is one of the world's biggest hedge funds. They have about $70 billion. They're a
00:04quant fund, meaning they run with computer algorithms. And this is a fund that's been
00:10embroiled in a great deal of drama recently. Their two billion founders don't like each other.
00:16They've been in a multi-year-long feud. And our latest reporting talks about how they are now
00:22in arbitration against each other. And so how that is adding fuel to the fire at this firm that is
00:29huge and complicated and where the drama at the top has actually forced the hedge fund to reveal
00:37in regulatory filings a couple of years ago that the billionaire feud was a material risk to the
00:42firm and investors. And this is something we never see hedge funds do, let alone ones as secretive
00:47as Two Sigma. Right. And that's the amazing thing that Two Sigma has really long prided itself on
00:52secrecy. But this court, these legal issues are coming, you know, forcing these secrets out.
00:58Not to mention, John Overdeck, one of the co-founders is getting divorced from his wife. And that has
01:06revealed a lot of documents and I guess gossip, if you want to put it that way.
01:11No, absolutely. He owns about half of the firm, him and David Siegel. And so if he has to give up any
01:20share of his stake in the firm, that would impact the 50-50 split that these two have. If he has to give
01:27up any share in a settlement with his divorce. So what that means is, as these two billionaires have
01:34been fighting and debating control over this firm and how to run it, if there's a switch, because
01:40basically decisions have been gridlocked. And so because they each have an equal vote. And so when
01:47they, if that, if one person gets the upper hand, that can impact a great deal about the firm. And then you
01:52have this divorce, which there's allegations of siphoning money off to Wyoming and removing the
02:00wife from as a beneficiary of that. Overdeck, John Overdeck would argue, as he argues in the court
02:08proceedings, that she was never entitled to that capital and that it was not marital assets that
02:13were moved. But it's really, this story gives us an insight into how billionaires, when you're talking
02:19about this amount of money, how they think about their assets, the implications of it, and how in a
02:27divorce proceeding, these things can unravel. New Jersey's a no fault state, split everything 50-50.
02:33Good luck trying to get out of that one for Mr. Overdeck. So what does that mean about the future of
02:36the firm? If half of his half ends up with his ex-wife, soon to be ex-wife, would that suggest that maybe
02:43this firm splits apart, breaks up, reconfigures? Unclear on if any of those endings would happen,
02:50if the firm splits apart. But it's more a matter of, right now, how decisions are made. And if John
02:57Overdeck has less power, not 50-50 split with his co-founder, David Siegel, then would he have as much
03:04say in how the firm is run? This is also somebody who, they had both, the co-founders had both said that
03:10they would step back recently from running the firm, because it was so difficult, and it was
03:15getting in the way. And they had two other representatives, their proxies, sitting on the
03:21management committee. And then just eight months later, John Overdeck said, you know what, I'm
03:24coming back to run the firm. And so that in and of itself has been somewhat tumultuous for the firm as
03:31a whole. And it creates all of these really interesting relationships and tensions. And so when you look at
03:41this fight, every percentage of ownership matters a lot more than perhaps a word anywhere else.
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