New Mexico pension pulls $100m from Two Sigma

New Mexico's state pension fund has recently withdrawn $100 million from Two Sigma Investments, despite the firm's impressive performance as a quantitative hedge fund, due to a dispute between its billionaire founders, according to Bloomberg. The Public Employees Retirement Association of New Mexico (PERA) cited organizational issues within Two Sigma as the reason for the withdrawal, as there was no clear resolution timeline for the internal conflict.

The fund's investment in Two Sigma's Absolute Return Enhanced Fund was valued at around $100 million at the end of March, according to sources familiar with the matter. The redemption occurred in June, despite PERA acknowledging the fund's strong investment record, which had outperformed both the pension's benchmark and comparable funds.

The Absolute Return Enhanced Fund gained 12.4% so far in 2025, following a 15% return in 2024. Two Sigma has since secured replacement capital for the strategy, which has been closed to new investors for several years. The withdrawal underscores the importance of organizational stability alongside investment performance when evaluating hedge fund allocations.

Two Sigma has been experiencing a public rift between co-founders John Overdeck and David Siegel, who disagree on the management and direction of the firm. The tension has led to senior departures and internal disputes, potentially leading to arbitration over whether Siegel's replacement for a departing management committee member should also receive the co-chief executive title. Two Sigma and the New Mexico pension declined to comment on the matter.