The billionaire founders of Two Sigma Investments—John Overdeck and David Siegel—are stepping down from day-to-day management after feuding for years and handing control to two new co-chief executive officers.

They will remain co-chairmen and advise the $60 billion firm on quant investing and technology, and their equity stakes will remain unchanged, according to a letter to investors Wednesday that was seen by Bloomberg. Chief Business Officer Carter Lyons, a 13-year-veteran of the firm, and former Lazard general counsel Scott Hoffman will take over as co-CEOs on Sept. 30.

The relationship between Overdeck and Siegel had become so strained that Two Sigma identified the rift as a material risk in a March 2023 regulatory filing—an unusual move for any hedge fund, let alone one as secretive as Two Sigma. The firm’s biggest management overhaul in its 23-year history is aimed at fostering improved collaboration among its most senior leaders.

“Over the past year and a half, we and our senior management team have dedicated significant effort to securing the long-term success and stability of Two Sigma,” Overdeck, 54, and Siegel, 63, wrote in the letter. “Throughout this process, our own roles have been a central consideration.”

The co-founders, quant-investing pioneers who built Two Sigma into one of the world’s biggest hedge funds, will continue to be its top-two investors and guide the firm’s strategy.

“Today, we are confident that stepping back from our day-to-day management roles is the right decision at this time,” they wrote.

The firm’s assets are distributed between two entities—Two Sigma Investments and Two Sigma Advisers. Overdeck will step down as chief investment officer of the former, and will be succeeded by Ali-Milan Nekmouche. Geoff Duncombe will continue to be CIO of Advisers.

Overdeck and Siegel met at D.E. Shaw in the 1990s. But they drifted apart, disagreeing over myriad matters related to Two Sigma’s operations—including organizational and succession planning, defining roles and responsibilities for top executives, and the firm’s design and management structure, according to last year’s filing.

Tensions were already affecting employees’ ability to fully implement key research, engineering or business initiatives, according to the filing.

Siegel and Overdeck, a mathematician who worked for Jeff Bezos in the early days of Amazon.com Inc., control practically all of Two Sigma’s equity, with the latter owning slightly more, the Wall Street Journal reported last year. Overdeck and Siegel each have a net worth of about $6.2 billion, according to the Bloomberg Billionaires Index.

Two Sigma’s Absolute Return Enhanced Fund gained 10.6 percent in the first half of the year, while its flagship Spectrum Fund rose 6.1 percent.

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Two Sigma Billionaire Founders in Rift That Poses Material Risk

(Updates with name of Two Sigma Investments’ new CIO in seventh paragraph.)