![]() ![]() Since the start, Two Sigma has generated $15.2 billion in net gains, ranking No. In 2018 alone the firm generated $3.2 billion in net gains for its investors, the third-highest amount among all hedge fund firms - behind only quant-driven rivals Bridgewater Associates and Renaissance - according to an annual analysis by London-based LCH Investments. ![]() Since its inception the Two Sigma fund, the firm’s first fund, has compounded at a double-digit percentage rate, on average, and the funds in aggregate have been profitable every year. The firm can thank strong performance for its remarkable growth. And its turnover is at a single-digit percentage rate. It employs some 1,600 people - two thirds of whom are in research and development roles, mostly with science and math backgrounds, including about 250 people with Ph.D.s. Today Two Sigma Investments manages about $60 billion, making it one of the world’s largest hedge fund firms. Jones and Hill could not have known how well those early bets would turn out. ![]() “At the end of the day, though, we had to take a leap of faith.” “We quickly became convinced Two Sigma had something special,” he says. But he recalls being reassured by the founders, as well as the firm’s culture, processes, and risk management capabilities. Hill knew Blackstone would never have access to the algorithms. “Cost is a big deal - the high frequency of transactions, speed.” “Even though we knew what Renaissance and Shaw were doing, as systematic investing was becoming more prevalent, we had a lot of questions - not just about their data science capabilities, but how they execute trades,” admits Hill, who retired as chairman of BAAM at the end of 2018 and is now a consultant to Two Sigma. ![]()
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