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Home / Business / FOX Business survey shows that Bill Hwang of Archegos created wealth at the pace of history before losing all his wealth

FOX Business survey shows that Bill Hwang of Archegos created wealth at the pace of history before losing all his wealth

easy Come Easy Go.

Bill Hwang, a hedge fund trader, lost about $8 billion in 10 days before his epic bankruptcy this week. In just seven years, his wealth has grown by a staggering 900% or even More. FOX Business has learned that for the staff of Archegos Capital Management, this may be one of the fastest wealth creation and destruction in recent history.

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7;s wealth (Wall Street sources said it was mainly the money he traded in Archegos), which was traced back in a research report prepared by the charity consulting group Jerold Panas, Linzy & Partners, Inc for a Christian university. At that time, he was seeking donations from Huang.

Who is BILL HANG, ARCHEGOS Fund Manager?

About seven years ago, King’s College was looking for wealthy donors to support its vision for Manhattan’s evangelical Christian higher education institution. The college commissioned a consulting company to help it estimate the net worth of someone who at least checked all the correct boxes on paper.

Huang, who has been engaged in hedge fund transactions for a long time, is both wealthy and very important in raising funds for evangelical institutions and causes. According to people familiar with the matter, the consulting company’s report was completed around 2014, and it is estimated that Huang Guangyu’s wealth is less than US$1 billion.

The person is a senior manager of the college, he said: “He is obviously rich, but not as rich as the other donors we are trying to join.”

Soon after, Huang became one of the school’s richest donors. Wall Street traders estimate that just before Archegos’s epic collapse in late March, Hwang was managing a portfolio worth between $10 billion and $15 billion. Most, if not all, is his own money, making him one of the richest people in the world.

Larry McDonald (Larry McDonald) is a former Wall Street trader and the author of the “Bear Trap Report” investment newsletter “Hedge Fund Professionals”. He estimated that Huang must increase his annual yield by 35% or more in order to See the explosive growth of this asset.

Goldman Sachs, Morgan Stanley snapped up the losses caused by ARCHETOS assets in a limited time

According to McDonald’s, this will make Huang one of some of the biggest and best traders on Wall Street before being blasted.

McDonald’s said: “If these numbers are accurate, it would be amazing.” “What impressed him was that he performed very well when hedge funds were in trouble and lost their favor for passive investment.”

McDonald’s added: “The only way to generate these types of numbers so quickly is to use a lot of leverage, and it’s correct in most cases. Surprisingly, he immediately gave everything back to him.”

Bill Hwang, who was released in 2012, moved to the United States after attending high school in South Korea and continues to lead one of Asia’s largest hedge funds.Photo: EMILE WAMSTEKER / BLOOMBERG News

Spokespersons for Archegos and Hwang declined to comment, but will not dispute any information in this report.

The company said in an earlier statement: “For the family office of Archegos Capital Management, our partners and employees, this is a challenging time. Mr. Hwang and the team were discussing all of them when determining the best way forward. plan.”

King’s College will not question FOX Business’s report, but said in a statement: “King’s College is grateful for Mr. Huang’s generosity… We have witnessed their philanthropy bring tremendous benefits to society and religion. In our Many of the plans that make them possible on campus are the weekly public reading of the Bible. The students gather to listen to the Bible reading aloud. Our prayers are carried out with Mr. Hwang and his staff on the foundation work and Archegos. Of this difficult time.”

Home offices like ARCHEGOS face huge risks from hedge funds

Jerold Panas, Linzy & Partners, Inc will not raise objections to this report, nor have they responded to numerous requests for comment.

According to the Internal Revenue Service of the Grace and Mercy Foundation, he donated nearly US$2 million to King’s College between 2011 and 2017, during which Archegos gained a considerable market income.

The Grace and Mercy Foundation, founded by Huang in 2006, has donated millions of dollars to well-known religious organizations in the United States and Asia, including Fuller Theological Seminary, the Bowery Mission for the homeless, and youth-centered organizations. Ministry, Young Life.

As reported by FOX Business, the foundation belongs to the Archegos family office that manages Huang’s wealth. Two shared offices and personnel.

According to his LinkedIn profile, Andy Mills, listed as “Executive Chairman and Chief Executive Officer” on the Archegos website, also served as the “Co-Chairman” of Grace and the Mersey Foundation. . Mills also served as the chairman of the board of King’s College from 2004 to 2014, and served as the acting president of the college twice in those two years.

Through an Archegos spokesperson, Mills did not comment.

The foundation’s IRS records show that Grace and Mercy was also involved in certain types of complex financial transactions that Hwang used in Archegos. Grace and Mercy received millions of stock donations, including high-tech Amazon and Netflix, but records show that the company also bought and sold derivative products called swaps, as well as various hedge funds and offshore trusts. Different.

Huang is described as a low-key and devout Christian, the son of a Christian evangelist from Korea. Unlike other financial planners, he avoided financial journalism and has never been included in the annual list of billionaires published by institutions such as Forbes. When he was quoted in the press, it was mainly about his Christian faith and charitable donations.

Hwang did leave his mark on the hedge fund business and Wall Street trading desks, although he was quiet, here he was hailed as an aggressive trader and disciple of former Tiger Management founder Julian Robertson (Julian Robertson) . In 2012, after the Securities and Exchange Commission (SEC) accused Huang of insider trading and stock manipulation, Huang was banned from engaging in hedge fund business.

Without admitting or denying wrongdoing, Huang settled the civil case for US$44 million and closed the hedge fund Tiger Asia at the time.

The ban will be officially lifted in 2020, but this did not prevent Huang from trading his accounts and obtaining derivatives through major Wall Street companies such as Credit Suisse and Goldman Sachs when he established his family office Archegos in 2013. Right to use.

In just seven years, how Huang can grow his business by 900% or more remains a mystery. However, according to Wall Street sources, Huang engages in a complex trading strategy. Some would say that this is a dangerous trading strategy that allows him to make relatively small bets on stocks and other investments and obtain generous returns. Through the use of leverage or high borrowing, he can further increase his income.

If the investor chooses the right one, such trading technology can create huge profits, but if the transaction is incorrect, it will cause huge losses.

Stock code Safety Last change change%
GS Goldman Sachs Group Co., Ltd. 327.64 +0.64 + 0.20%
CS Credit Suisse Group 10.70 +0.10 + 0.94%
NMR Na Na Na Na
Multiple sclerosis Morgan Stanley 78.22 +0.56 + 0.72%

It is said that Huang is a devotee of so-called “full-income swap” derivatives. He bought these stocks from major investment banks (such as Credit Suisse in Switzerland and Nomura in Japan) and was closer to home, such as Goldman Sachs and Morgan Stanley on Wall Street.

These swaps are financial products that allow traders to use their own money to spend relatively little money to create a large number of “synthetic” long positions in the company’s stock. Through the use of derivatives, Huang can establish a large number of long positions in certain stocks even if he does not directly own these stocks, thereby avoiding regulatory disclosure requirements. The trader said that he scattered these positions in these companies, effectively disguising his bets on various investments.

Although swap transactions can create huge returns in a rising market, they are also the most profitable products sold on the street. Traders said that Huang became one of Wall Street’s largest customers, which may be the reason why blue-chip companies that ignore the blue-yellow grid regulatory records.

This may also explain why the bank does not require more disclosure of the House of Cards Archegos is building. Ironically, one of Huang Guangyu’s best bets was the catalyst that led to his downfall: a huge long position in ViacomCBS, which kept hitting new highs until March 22 when it announced that it would issue new shares.

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This news caused a strong sell-off from investors because investors were worried about being diluted. The sharp decline in ViacomCBS triggered a margin call that Archegos could not satisfy, and some of his other positions began to waver.

Stock code Safety Last change change%
more VIACOMCBS, INC. 44.64 -0.46 -1.02%

By the last week of March, his broker began to sell his positions and positions related to his transactions, selling an estimated $50 billion to $100 billion in various securities. In the process, Huang’s agent suffered billions of dollars in losses when liquidating these bets.

Credit Suisse (Credit Suisse) said its unspecified losses would be significant losses, and traders estimated that the losses could reach US$3 billion to US$5 billion and forced the company to raise funds. According to people familiar with the matter, Goldman Sachs said that losses are not important to its income statement, but could be as high as $1 billion.

The Securities and Exchange Commission is investigating the matter. Goldman Sachs and Credit Suisse declined to comment. The SEC said in a statement: “Since last week, we have been monitoring the situation and communicating with market participants.”

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At King’s College, Huang’s troubles were both sad and shocking.

A former student recalled a speech he gave at school in 2019, in which Huang Mou talked about how his faith and financial work are intertwined.

According to those present at the meeting, Huang told the students that if he was more open about his wealth, he would be among the top billionaires in Forbes. He said: “I did check the list of billionaires and thought that if I were not under surveillance, my status would be high.”

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