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 in Newark is the biggest contested divorce in Garden State history, Lyons said. 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 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.

“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 on the stand that the firm now manages $80 billion.

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.

“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 spent the majority of his time on the stand Wednesday afternoon describing the early years of his career and the events that led up to the founding of Two Sigma. He is scheduled to return to the stand on Tuesday.