June 15, 2021

Hedge Fund Two Sigma $ 60bn, the same puppeteer?

Hedge Fund Two Sigma $ 60bn, the same puppeteer?

Story

Two Sigma Investments was founded in 2001 by John Overdeck, David Siegel and Mark Picard. Siegel is a doctor of computer science fromMassachusetts Institute of Technology and served as Director of Information Technology at DE Shaw & Co. before the creation of Two Sigma. Overdeck is a silver medalist at the International Mathematical Olympiad, who subsequently studied mathematics at Stanford University, and then transferred to the post of managing director at DE Shaw, before joining the co-founders of Two Sigma. Picard served as president of the firm from its inception until his retirement in 2006.

According to Two Sigma, the company name was chosen,to reflect the duality of the word sigma. The lower case sigma, σ, indicates the volatility of the return on investment for this standard, and the upper case sigma, Σ, indicates the amount. Putting together the volatility of individual positions, measured in relation to the standard, Two Sigma can strengthen forecast signals, the company’s website says.

In October 2013, Two Sigma Private Investmentsannounced that it is joining Stephen Hannah to set up Wings Capital Partners, a private equity, investment, advisory and financing business. In July 2014, it was announced that Simon Yates, Citigroup’s head of derivatives and sales, left the bank to join Two Sigma.

In 2016, Two Sigma Investments took 11th place in the ranking of Penta's 100 largest hedge funds.

In 2017, the company began to hold competitionsdevelopment of trading algorithms for Big data on Kaggle. This competition was called “Using News to Predict Stock Movements,” which received 31,475 applications in nine days. The first prize of this promotion was $ 25,000, then $ 20,000, $ 15,000 and $ 10,000. Two other contests held by Two Sigma at Kaggle two years ago were dedicated to financial modeling.

Overdek and Siegel also expanded theirphilanthropic activity. The Overdeck Family Foundation, led by John Overdeck's wife, Laura Overdeck, provides educational opportunities for young children, educators, STEM (science, technology, engineering, and math) classes and data usage.

Siegel Family Foundation provides supportorganizations that help prepare society for the impact of technology by funding organizations such as Scratch, which train children in computational thinking using coding, and efforts such as Data & Society, a research institute that studies social problems that may arise from the widespread technologies.

Features

Two Sigma has always focused on data science and technology. It was an early driver of many important tools, such as machine learning and artificial intelligence.

Two Sigma was featured in the business press of herunusually high profitability comparable to its older and more mature competitors DE Shaw & Co. and Renaissance Technologies. In October 2014, Two Sigma raised $ 3.3 billion for a macro hedge fund in one of the largest new pools of such capital raised after the 2008 financial crisis.

The Two Sigma structure is divided into severalspecialized units that engage in private investment, venture capital investments (with an emphasis on companies working in the field of data science), advising institutional clients and managing a high-frequency broker-dealer.

Duplication of Confidential Information Case

In February 2014, Forbes announced that the formerTwo Sigma employee Kang Gao, 29, was prosecuted by the Manhattan District Attorney and charged with using a remote access device to view Two Sigma's proprietary shopping models and email this information to his personal email account. As of October 2014, Gao was sentenced to 8 months in prison. In February 2015, Gao pleaded guilty to “illegally accessing and copying private and confidential information related to the firm’s trading methods.”

Structure

Two Sigma has seven groups of funds with absolute income, which are divided into two main types: neutral to the stock market and various macro strategies. Some of them:

Two Sigma Investments (TSI) is the oldest andcurrently the largest subsidiary of Two Sigma. The fund does things standard for hedge funds and offers a selection of products from which clients can choose the most suitable ones.

Two Sigma Advisors (TSA) LLC is a subsidiary of Asset Management, which deals with individual investment products targeted at individual clients.

Two Sigma Ventures is committed to investing incompanies that push the boundaries of the industry and bring real progress in the world, using the capabilities of data science, machine learning, distributed computing, artificial intelligence, modern equipment and related fields.

Description from the site: “Founded in 2009, Two Sigma Securities is a SEC registered broker, member of major US stock exchanges and a registered market maker of more than 8,000 shares. The high-performance platform delivers over 300 million orders per day. We apply cutting-edge technology in a data-rich financial world. Our disciplined, process-driven, systematic approach uses technical design, risk management and performance measurement, which allows us to be a leader in the wholesale market. ”

Sightway Capital specializes ininvesting in financial services and in real assets. The company uses its core approach and flexible capital approach to create successful business platforms. The Sightway Capital team thinks about the long term, focusing on business opportunities that provide both asymmetric risk compensation and the creation of enterprise value over time. They are looking for opportunities in and around resource-intensive industries where their team has significant work experience.

Strategy

From the company's website: “Technology conducts our business. We use machine learning, distributed computing, and other technologies to find connections in world data. We pushed the boundaries of big data even before it became a buzzword. For us, this is just data. We work with an extensive selection of over a thousand different sources.

Guided by the scientific method, we developmodels that start with inspired ideas or economic hypotheses. Systematically, taking into account the processes, the models are expanded, tested and integrated into our investment strategies. ”

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By position:
BTCUSD - long was covered at 9 a.m. in Beijing, now I am expanding my personal borders in this country of the future NGO (I myself did not expect such an impression).
Loss of -0.2% on deposit and turned into a short, I recall that while the flagship strategy is based on catching large directional movements, based on the hypothesis that markets have inertia.

ETHBTC stay in long.
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In fact:
I spend a couple of hours a day on a tester, finished 60%, after which I want to drive off all assets, including foreign exchange and stock markets.
If everything is ok there, then there will be a riskstretch into dozens of single-correlation assets, which will solve the problem in non-24/7 markets, when the asset opens with a gap after the weekend and the stop limit is not executed, sinking the deposit.
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P.S. How I build my international hedge fund, research, deals and problems along the way, I write everything in my small telegram blog, I will be glad to support and advice - https://t.me/drsombre