Top MBA Recruiters: Two Sigma Investments

Two Sigma

Two Sigma may sound like a secret government program or an evil super villain organization, but it’s actually one of the largest privately owned hedge fund sponsors in the world today. Two Sigma Investments, LP—formerly known as Two Sigma Investments, LLC—was founded in 2001 and is based in New York City, but also has major branches in the Houston, London, and Hong Kong Metros as well.

The basis of Two Sigma Investments is the founders’ shared belief that innovative technology and data science could help discover value in the world’s data to consistently deliver value for clients. According to the company, it is this belief that drives its ongoing development of new technologies that synthesize and integrate vast amounts of data, yielding results that seek to drive smarter investing and more consistent returns.

Here are some numbers from Two Sigma to make you think about how the power of technology and data intermingle with investments:

  • Two Sigma has compiled more than 22,000,000 gigabytes of data to help test and develop countless investment models.
  • The firms has more than 10,000 data sources, both public and proprietary.
  • The firm also boasts an impressive 87,000 computer processing units with 1,000 terabytes of memory.
  • These processors can 1×10^14 calculations per second.

Another number that’ll pop out at you: Two Sigma manages $37 billion in assets in more than 40 countries. According to Bloomberg, Two Sigma primarily provides its services to pooled investment vehicles and manages commingled funds via investments in public equity, fixed income and alternative investment markets around the world.

Two Sigmas uses the following tactics to make its investments:

  • Statistically-based strategies
  • Merger arbitrage and closed-end fund/constituent arbitrage strategies
  • Fundamentally-driven strategies
  • Event-driven strategies
  • Spread-based and long/short strategies
  • Volatility arbitrage and trading strategies
  • Structured credit trading strategies
  • Contributor based and sentiment-based strategies

 
Two Sigmas employs a combination of quantitative and fundamental analysis to make its portfolios, using swaps as a technique to make them. According to Bloomberg, it invests in a broad range of fixed income securities to make its fixed income investments.

Who’s running the show at Two Sigma? The firm was founded by David Siegel and John Overdeck—two men who are recognized pioneers in the fields of technology and investment management. Together, the two have more than 40 years of experience in the development of computer-driven, model-based trading systems.

Last year, the company hired Alfred Spector, a former senior Google engineer, to be its chief technology officer; a hire that shows how computer scientists redefining the investment industry. At Google, Spector worked on machine learning, speech recognition and translation. Before that he worked at IBM. He holds a Ph.D. in computer science from Stanford University.

The firm employs a combination of in-house and external research to make these investments. Regarding employment, Two Sigma boasts a 97 percent voluntary employee retention, point to the fact that people like working at the firm. Interestingly enough, 60 percent of the company’s employees also don’t come from financial backgrounds.

As the firm’s website points out,

Most of us don’t have financial backgrounds. This helps us see what others in the industry don’t.

How can you get a foot in the door at Two Sigma? The firm offers a 10-week paid summer internship program in Soho, NYC. Interns can work in either Quantitative Research and Software Engineering, and will work on a single project during the course of the internship. Two Sigma assigns all interns with a mentor, and expects interns to present the results of their projects at the end of the program.

The are several perks to the Two Sigma internship. Interns are able attend internal speaker series, game nights, roof parties, 3D printing classes, food tours, Broadway shows and much more. Internships are paid up to $10,517 per month (the highest-paid internship in the United States, currently), plus an additional $5,000 per month for housing. According to Time Money, the firm is currently hiring for over 80 positions at the their offices in New York, Houston, London and Tokyo.

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About the Author

Max Pulcini

Staff Writer, covering MetroMBA's news beat for Chicago, Washington D.C., and Baltimore.

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