Archegos hedge fund losses like ‘fender bender’ on highway: UBS portfolio manager
UBS managing director and senior portfolio manager Jason Katz weighs in on today’s markets and economy.
Losses at Archegos Capital Management have triggered the liquidation of positions approaching $30 billion in value, The Wall Street Journal has reported, and sent the shares of two major investment banks tumbling. Archegos is run by former Tiger Asia manager Bill Hwang. What do we know about Mr. Hwang?
Bill Hwang is a ‘Tiger cub.’
Mr. Hwang is a former protégé of hedge-fund titan Julian Robertson, who founded Tiger Management in 1980 and turned an initial $8.8 million investment from family and friends into nearly $22 billion before stepping back almost two decades later. A number of investors trained by Mr. Robertson who went on to start their own hedge-fund firms became known on Wall Street as the “Tiger cubs.”
Archegos is estimated to have managed about $10 billion.
Mr. Hwang managed around $10 billion of family money through Archegos. The firm made big bets on public stocks in the U.S., Europe and Asia. Unwinding of his positions caused sharp falls last week in many stocks, including ViacomCBS Inc. and Discovery Inc., even as broader markets rose.
GOLDMAN, MORGN STANLEY LIMIT LOSSES WITH FAST SALE OF ARCHEGOS ASSETS
Bill Hwang previously ran Tiger Asia.
Mr. Hwang founded Tiger Asia Management LLC in 2001 with support from Mr. Robertson. The firm was based in New York and went on to become one of the biggest Asia-focused hedge funds, running more than $5 billion at its peak. In 2008, it was one of a swath of funds that suffered losses related to the soaring share price of Germany’sVolkswagen AG .
He paid to settle an insider-trading case.
In the summer of 2012, Tiger Asia said it planned to wind down and return outside capital to investors. Later that year, the firm pleaded guilty to a criminal fraud charge and agreed to pay $44 millionto settle civil allegations by U.S. securities regulators that it engaged in insider trading of Chinese bank stocks.
“Tiger Asia regrets the actions for which it accepts responsibility today and is grateful that this matter is now resolved and behind it in the United States,” Mr. Hwang said in a statement at the time.