Two Sigma Founder’s Wife Seeks Share of Firm in Divorce
(Bloomberg) — Two Sigma Investments’ billionaire co-founder John Overdeck schemed to leave his wife Laura “with as little as possible,” her lawyer said as the couple’s divorce trial began, an amount she pegged at $633 million.
During opening statements Wednesday, Theresa Lyons, Laura’s lawyer, compared that figure to the more than $10 billion she said John made over the past nine years. Lyons said the quantitative hedge fund titan had “methodically and strategically” plotted for decades to keep most his wealth from his wife in the event of a divorce.
The trial before New Jersey Superior Court Judge Bruce Buechler, is the biggest contested divorce in Garden State history, Lyons said. Laura and John barely acknowledged each other as they sat just feet apart in the small, cramped Newark courtroom, each accompanied by three lawyers. Buechler will decide the case without a jury, though his ruling will likely come some time after trial.
John’s lawyer, Jonathan Wolfe, said his client was proposing to give his wife $723 million in equitable distribution tax-free. But the fight is over whether Laura’s entitled to a sum in the billions tied to the value of Two Sigma.
Laura is seeking 35% of the value of his stake in the firm, which Lyons said is worth about $6.2 billion. Wolfe said the value is $4.9 billion. Among other requests, Laura also wants hundreds of millions of dollars in Treasury bonds held in a revocable trust and an order reinstating her to equal control of their family foundation or directing John to contribute 50% of the value of the foundation to the charity of her choice, Lyons said. In its 2024 tax filing, the Overdeck Family Foundation said it had assets of $920 million.
The main issue at trial is whether John’s stake in the firm is a marital asset. His lawyers contend it is not, noting that it was founded nearly two years before the couple’s 2002 marriage. They say Two Sigma had to build trading systems and predictive forecasting models — and prove they worked — before it was able to secure their first $15 million in funding.
Read More: Two Sigma Co-Founder’s Divorce Threatens to Drag Firm Into Drama
“The company had done substantial work and managed hundreds of millions of dollars before the parties’ marriage,” Wolfe said in his opening statement.
But Lyons said that Two Sigma was only a “concept of a notion of a company” before their marriage, noting it didn’t begin actively trading assets until after their wedding. John’s stake also didn’t vest until after he and Laura married, Lyons said.
Two Sigma’s greatest growth occurred during the couple’s marriage. It had under $1 billion in assets under management in 2001. John, who began testifying Wednesday afternoon, said that the firm now manages $80 billion.
The Overdecks married in October 2002, the year after Two Sigma was founded, and have three children between the ages of 17 and 22. They “built a family together” and a “substantial charitable legacy” through the establishment of a family foundation to support improvements in US education, Lyons said.
‘More than Enough’
But Lyons said John “worked tirelessly” to try to hide assets from his wife, saying he was “planning his escape” throughout the marriage. She accused him of orchestrating a “multi-step scheme” to strip billions of dollars from the marital estate and “cheat her out of control of that charitable foundation.”
“John Overdeck is not a man who woke up one morning and decided to divorce his wife,” Lyons said. Laura is separately suing her husband’s estate lawyers at law firm Seward & Kissel, claiming they helped him shield assets.
Wolfe said John earned $685 million during the marriage, all of which was put into their joint account. John already made billions of dollars before he married Laura, the lawyer said.
“John acquired his interest for the work he did before the marriage,” Wolfe said. Before he co-founded Two Sigma, John worked at DE Shaw & Co. and was also one of Jeff Bezos’ early employees at Amazon.com Inc.
Wolfe said his client’s offer to his wife was “more than enough to meet the needs of the parties’ marital lifestyle.”
John took the stand after the lunch break on Wednesday. He spent about two hours on the stand as the first witness in the case, describing the early days of his career, the rise of quantitative trading and the events that led up to the founding of Two Sigma.
Amazon Incentive
He recounted how he was a mathematics prodigy, scoring 700 on the math portion of the SAT at 11. After graduating from Stanford, he interned at Bell Labs, where he did some of his earliest work on stock prediction models, before going on to work for DE Shaw at 22.
He said he spent seven years there before moving to work with Bezos, a fellow DE Shaw alum, as Amazon’s vice president for customer management in 1999. But John said he was always interested in returning to Wall Street and began having discussions with another former DE Shaw colleague, David Siegel, about founding the quant firm that became Two Sigma.
“I thought this was a good time to pursue such a strategy,” John said on the stand.
John testified that he decided to leave Amazon despite being offered an incentive package that would have been worth $8 billion today.
His testimony on the early days at Two Sigma didn’t touch on the recent turmoil at the firm. He and Siegel have been embroiled in a years-long feud over the direction of the company, which the firm disclosed as a material risk in 2023.
