![]() ![]() Hwang was seen as a compelling prospective client by prime brokers, the potentially lucrative but risky division of investment banks that loans cash and securities to hedge funds and processes their trades.Ĭoncerns about his reputation and history were offset by a sense of the huge opportunities from dealing with him, according to two of Archegos’ prime brokers. The US bank started to work with him again just last year, according to two people close to the matter, but only after years of lobbying by its bankers to convince the risk department to allow it. Once Hwang started running Archegos, Goldman Sachs took the longest to remove him from its blacklist. “The scale, the potential implications for our business, and how so many banks could be so taken-in by either their own greed or by an otherwise interesting investor.” ‘Aggressive, moneymaking genius’įollowing his brush with the law, initially banks’ risk departments had deep reservations about dealing with Hwang. ![]() “No one has ever seen anything like this before,” said an executive at a Wall Street bank. Between them, the banks had extended billions of dollars in credit to the family office to allow it to make highly-levered bets on US and Chinese stocks.Īs markets around the world digested the shock announcements, bankers and investors were left scrambling to answer a series of questions: why had banks bent over backwards to deal with a hedge fund manager with such a chequered history? How had Archegos managed to stay largely beneath the radar despite amassing large positions in blue-chip names? And what will be the regulatory fallout from the debacle? And soon, many of the world’s top investment banks were fiercely competing for its business.īanks including Credit Suisse and Nomura on Monday warned investors and regulators that they face billions of dollars in losses from their dealings with Archegos after it defaulted on margin calls. He set up a secretive new family office called Archegos Capital Management. But just 12 months after he was forced to return money to investors, Hwang was back in the game. In theory, Hwang might have found himself permanently blacklisted by investment banks everywhere. It marked a fall from grace for its founder, Bill Hwang, one of the so-called “Tiger Cub” veterans of Julian Robertson’s Tiger Management fund.įollowing Bill Hwang’s brush with the law, banks’ risk departments initially had deep reservations about dealing with Hwang. Hong Kong/Tokyo | In 2012, New York-based hedge fund Tiger Asia Management pleaded guilty to using inside information to trade Chinese bank stocks, resulting in a massive settlement with US regulators. ![]()
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