NEW YORK CITY — What do you picture when you imagine a hedge-fund office? A noisy trading floor full of hedge-fund guys in fleece vests?
Two Sigma, a $US45 billion hedge-fund firm that uses advanced technologies to find investment opportunities, is a little different. The firm, which says it has seen head count grow by more than 400% in the past seven years, is as much a technology company as it is a finance company, analysing over 10,000 data sources to find patterns in markets.
That approach seems to have paid off. Two Sigma ranked as the fifth-biggest hedge fund in the world in Institutional Investor’s Alpha’s 2017 Hedge Fund 100 list, while cofounders David Siegel and John Overdeck each made $US750 million last year, according to the magazine’s list of the top-earning hedge-fund managers.
The firm also runs an insurance business, Two Sigma Insurance Quantified, a market-making arm called Two Sigma Securities, and a venture-capital arm.
In August, Business Insider took a tour of the firm’s two New York offices, which are across the road from each other in the SoHo neighbourhood. The offices are stashed with arcade games, computing memorabilia, gyms, a hacker space, and a music room.
There was a teach-in on Python for Research when we visited 101 Avenue of the Americas, one of three talks the firm hosts weekly.
You may be able to see a Juicero machine on the left side. Two Sigma Ventures, the venture arm of Two Sigma, is an investor in Juicero, which recently announced a price cut and layoffs.
Across the road at 100 Avenue of the Americas, there's another kitchen, with staff taking time out to play games.
Two Sigma hosts cook-offs at the office, where all the ingredients have to be sourced from the pantry.
The office is decked out with references to computing history, including these old-school keyboards.
All employees are taught how to use LEDs on their first day at the firm.
The space is full of old screens and computer gear, and staff are welcome to drop in and spend time taking things apart, building things, and playing with the 3D printer. The space also hosts classes in the evening.
This is Baxter, a humanoid robot made by Rethink Robotics. Two Sigma Ventures is a backer.
Rachel told us that programmers often visit for 20 or 30 minutes at lunch as a diversion. 'This is my way of expressing myself,' she said, as she showed us some jewellery with LEDs.
Two Sigma also hosts an annual artificial-intelligence competition, and in 2016 it pitted AI against humans in a game of air hockey.
It was a quiet day when we visited. Still, it was striking that the office didn't feel like the finance offices we've visited. Apart from a few big screens on the walls with charts, there was little to giveaway that this was the office of a $45 billion hedge fund.
Two Sigma Ventures invests in early stage startups, primarily at seed stage and in Series A funding rounds, though it follows on as companies progress. It has invested in more than 50 companies to date, most of which are focused on data science and analytics. The idea is that Two Sigma's expertise in these fields gives the venture arm an advantage in finding and selecting attractive investments.