The man behind the New York-based firm that caused a $30 billion stock market fire sale is deeply religious, previously pleaded guilty to ...
The man behind the New York-based firm that caused a $30 billion stock market fire sale is deeply religious, previously pleaded guilty to insider trading and was once deemed so risky by Goldman Sachs that the firm refused to do business with him for years.
Bill Hwang, who is in his 50s and is the son of a Korean preacher, is the founder and co-chief executive at Archegos Capital Management based in New York.
Hwang's firm is at the center of the crisis that caused shares of major investment banks Nomura and Credit Suisse to tumble after they issued profit warnings when Archegos defaulted on margin calls last week, Bloomberg reports.
Losses at Archegos triggered a fire sale of stocks on Friday and warnings on big losses triggered a sell-off in banking stocks around the globe on Monday.
Hwang, who managed about $10 billion of family money through Archegos, has been known to use out-sized leverage to magnify his bets in American, European and Asian markets.
Bill Hwang, who is aged in his 50s and is the son of a Korean preacher, is the founder and co-chief executive at Archegos Capital Management based in New York
He was a former protege of billionaire hedge fund manager Julian Robertson having previously worked as an equity analyst at Robertson's Tiger Management.
Investors who were trained by Robertson - including Hwang - were often referred to as 'Tiger Cubs' on Wall Street.
Hwang also previously worked as an institutional equity salesman at both Peregrine Securities and Hyundai Securities.
He went onto create and run Tiger Asia in 2001 with the backing of Robertson, who invested $25 million. The hedge fund, which was based out of New York, sought to profit on bets on securities in Asia. It went on to become one of the largest investors in Asian markets.
In 2012, Hwang pleaded guilty on behalf of his hedge fund to insider trading charges by the US Securities and Exchange Commission.
His fund was found to have gained $16 million in illicit profits between 2008 to 2009.
Hwang admitted his fund repeatedly used inside information from investment banks to trade and he and his firm agreed to pay $44 million to settle in 2012.
The SEC investigation effectively put Tiger Asia out of business.
In 2013, Hwang went onto turn his fund into a family office and renamed it Archegos Capital Management to run his private wealth.
As a family office, Archegos doesn't have any obligation to register with the SEC - even though it has billions of dollars in exposure to publicly traded US companies.
Despite having such a large portfolio, there is barely any public information around regarding Archegos' financial disclosures.
Hwang, who managed about $10 billion of family money through Archegos, has been known to use out-sized leverage to magnify his bets in American, European and Asian markets.
Archegos Capital Management is based in this office on 7th Avenue in Midtown Manhattan
His past resulted in major bank Goldman Sachs refusing to do business with him, sources told Fortune.
Goldman was still refusing to let Hwang or Archegos to open an account with them as recently as 2018.
A decade after his illegal trades, Goldman allowed Hwang to do business with them again and he eventually became one of the bank's top clients.
In 2013, Hwang went onto turn his fund into a family office and renamed it Archegos Capital Management to run his private wealth. As a family office, Archegos doesn't have any obligation to register with the SEC - even though it has billions of dollars in exposure to publicly traded US companies
Goldman was among the major banks that saw its stocks decline on Monday. Like Goldman, shares in Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co dropped between 1.6% and 2.5%. Shares in Morgan Stanley tumbled about 5% after reports it had sold billions of shares.
Hwang attended high school in South Korea before moving to the United States after his senior year.
He has a bachelor's degree in economics from the University of California and completed his MBA at Carnegie-Mellon University.
It is unclear if he has children but is believed to have a wife named Becky.
The son of a Korean preacher, Hwang is deeply religious and has previously suggested that God loves his investments in companies that helped humanity.
In a 2018 interview, Hwang spoke of his early investment in LinkedIn and said the networking site helped people find jobs.
'I'm like a little child looking for what can I do today, where can I invest, to please our God,' he said.
His past resulted in major bank Goldman Sachs refusing to do business with him for several years, according to source. A decade after his illegal trades, Goldman allowed Hwang to do business with them again and he eventually became one of the bank's top clients
He is involved in several Christian organization in the US and Asia, including the Grace and Mercy Foundation, which he co-founded.
Neither Hwang or anyone at Archegos have commented on the firm defaulting on margin calls last week.
A margin call is when a bank asks a client to put up more collateral if a trade partly funded with borrowed money has fallen sharply in value. If the client cannot afford to do that, the lender will sell the securities to try to recoup what it is owed.
Margin calls on Archegos Capital prompted a massive unwinding of leveraged equity bets.
Nomura and Credit Suisse are now facing billions of dollars in losses as a result of Hwang's firm defaulting on margin calls, putting investors on edge about who else might have been caught out.
Shares in ViacomCBS and Discovery each tumbled around 27% on Friday, while US-listed shares of China-based Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday's closing levels.
Bloomberg reported on Monday that the leverage provided to Archegos by banks including Nomura and Credit Suisse was through swaps or contracts-for-difference, citing sources, meaning they would not have to disclose holdings publicly.
Investors were nervous about whether the full extent of Archegos' apparent wipeout has been realized or whether there was more selling to come.
The scale of the losses at banks is likely to prompt questions about banks' oversight of their exposure to Archegos.
Hwang's firm is at the center of the crisis that caused shares of major investment banks Nomura and Credit Suisse to tumble after they issued profit warnings when Archegos defaulted on margin calls last week
Nomura and Credit Suisse are now facing billions of dollars in losses as a result of Hwang's firm defaulting on margin calls, putting investors on edge about who else might have been caught out
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