(Bloomberg) As the sun rose, outside the conference room in Midtown Manhattan, tourists from a secret investment empire bowed their heads in prayer and meditation.
It was another Friday morning, at seven o’clock, a familiar scene appeared inside Archegos Capital Management Company. This is a humble family office that will continue to shake the financial world.
In the days before the pandemic, according to people there, 20 or 30 people huddled together around long tables, drinking coffee and Danes while listening to Bible recordings.
The first may be the Old Testament, maybe Isaiah or Lamentations. Then there is the new gospel book, which calls for the audience, who have walked out of a path known for earthly greed rather than pious faith: Wall Street.
The host, Bill Hwang, pressed the play button and then stepped back to the background. The mysterious billionaire trader is now at the center of one of the largest Wall Street murals of all time.
The story so far-secretly creating incredible wealth, then publicly erased in the blink of an eye-has shocked some of the most powerful banks in the world. Estimates of the potential size of his job before it collapsed have soared to $1
But these narratives only explain part of the situation. Interviewed people in Huang’s circle, Wall Street players close to him, and documents related to his multi-million dollar charitable foundation, which filled in missing pieces of the puzzle-not previously reported.
The scene that emerges is different from everything Wall Street might suspect.
In a sense, not one, but two Bill Hwangs.
One of them walked for a few hours, through New York’s Central Park, listening to recordings of the Bible, and harboring a new vision of the ancient ideals of the 21st century: the modern Christian capitalist, the financial speculator of Christ, he seeks to make money in the name of God , And then use it to promote faith. Huang Guangyu is a generous donor of a series of disgraceful Christians (mainly conservatives), avoiding the shackles of luxury wealth, taking a bus, taking a commercial plane, and living in a humble suburb by the standards of a New Jersey billionaire.
Then there is another Bill Hwang: a former assistant to hedge fund legend Julian Robertson, his desire for risk and tolerance for turbulent markets – a bold trader who used to operate A hedge fund lost its bet on Volkswagen AG, a German automaker. It is said to focus on Asian stocks.
This is also Bill Hwang, who later quietly became one of the most successful alumni of Robertson’s bragging Tiger Management Company. The move concealed his experience of making dangerous leveraged bets in public view through financial derivatives. He was accused of insider trading and pleaded guilty in 2012 for fraud on behalf of his hedge fund Tiger Asia Management.
It turns out that it is also Bill Hwang, who is also the hottest investor on Wall Street recently, a supporter of Cathie Wood of Ark Investments. Like Huang, Wood also held bible study conferences and discussed certain figures known as the “Financial Faith” movement.
Finally, where Bill Hwangs clashed. In the eyes of major banks and financial regulators, the wealth he has accumulated is much greater than almost anyone imagined, and the risks are greater-these wealth come together at an alarming rate. In fact, it may be one of the largest accumulations of private wealth in modern financial history.
Huang lost everything even faster.
Many traders who do business with the company believe that the Greek word Archegos is often translated as “author” or “captain” and is often considered a reference to Jesus. The company’s total assets are more than 10 billion U.S. dollars. According to people who do business with Archegos, the figure representing Huang’s property is actually close to 20 billion U.S. dollars.
Put this number in context: Bill Hwang is rarely heard on Wall Street until now. He is worth more than Ray Dalio and Steve Cohen. ) And David Tepper (David Tepper) and other well-known industry figures are still high.
What is more striking is that Huang’s wealth has grown at an alarming rate. Archegos started in 2013 and is valued at approximately US$200 million. This is a considerable asset, but it is far from a big deal in the hedge fund game.
However, traders and bankers now estimate that within ten years, Huang’s wealth has soared by 100 times. In the past 12 to 24 months alone, most of this wealth has accumulated, because Huang began to use leverage more and more to earn returns, and banks are eager to obtain lucrative trading business, and Eagerly hope to take on their responsibilities by expanding credit.
Hwang’s success allowed him to donate to his charity, the Grace & Mercy Foundation, which, according to its latest tax return, had nearly $500 million in assets as of 2018.
King’s College is an institution near the Wong family and a beneficiary of the Wong Foundation. King’s College is a small Christian school located in the center of New York’s financial district.
In a statement to Bloomberg, the university expressed its gratitude to him for his generosity and said: “We pray for Mr. Huang and his staff.”
The story of Bill Hwangs (Bill Hwangs) began in South Korea. He was born in 1964 in Sung Kuk Hoang. The story he told his friends and colleagues was a familiar experience of immigration efforts-the subsequent financial success made few people understand even on Wall Street.
Huang grew up in a religious family (about one-third of Koreans, his parents are Christians). When he was a teenager, the family moved to Las Vegas, and his father found a job as a pastor in a local church. Huang told a friend that he could not speak or speak English when he arrived in the United States, and he could only learn English during McDonald’s work night. Shortly thereafter, his father died, and his mother moved the family to Los Angeles. Hwang went on to study economics at the University of California in Los Angeles and then received an MBA from Carnegie Mellon University in Pittsburgh.
Financial beckoning-it turns out that Huang is very good at this. When part of Hyundai Group, he was a low-price salesman for Hyundai Group, but he caught the attention of Julian Robertson. Huang, who was less than 33 years old at the time, was given a gold ticket to Wall Street: an offer to join Robertson’s Tiger Management Company, and he was the company’s leader at the time.
Hwang quickly established himself by introducing Robertson to the Korean market-at the time in the Asian financial crisis-and planned to become a profitable stake in SK Telecom Co.
Tiger’s colleagues say that Huang is one of Robertson’s most successful products-a quiet, methodical analyst who is attentive. Even today, he always keeps his desk tidy to better concentrate. These people remember that Robertson called him “the Michael Jordan of Asian investment.”
Robertson, 88, still regards Huang as a friend. A few months ago, the two had lunch together in Hampton.
Robertson told Bloomberg after news of Archegos’ loss spread: “He is definitely not a small person, this is a certain thing.”
Huang finally attacked himself as a so-called tiger cub. Initially, Hwang turned off the lights. Until 2007, his assets under management reached US$8 billion, with an annualized rate of return of 40%.
The winning streak did not last. At the end of 2008, his “Asian Tiger” suffered a heavy loss in a big bet against the public. Many other hedge funds are also shorting the German automaker, and when Porsche Car Holdings suddenly announced that it would increase its shares, everything went into a mess. Volkswagen soared 348% in 48 hours, crushing shorts like Huang.
Tiger Asia fell 23% at the end of the year. Many investors withdrew their capital and were angry that hedge funds, which should have focused on Asia, had fallen into some degree of austerity.
People who know him say that for Huang, this is a painful and useful lesson. In the future, he will look for stocks that many traders are shorting rather than long stocks. This year, driven by social media’s enthusiasm for GameStop and other stocks, millions of amateur investors have adopted this approach.
But before the next success, Tiger Asia encountered more trouble-this time the trouble was big enough to end Hwang’s days as a hedge fund manager.
The US Securities and Exchange Commission said that when Tiger Asia pleaded guilty to wire fraud in 2012, the stock exchange said the company used inside information to trade the stocks of two Chinese banks. Hwang and his company eventually paid $60 million to settle criminal and civil charges. The SEC banned him from managing external funds, and the Hong Kong authorities banned him from trading in the country for four years (the ban ended in 2018).
Mr. Huang was turned away by hedge funds and opened Archegos, a family office. The company recently hired about 50 employees, initially occupying a place at the headquarters of the New York Times designed by Renzo Piano. Today, it is located on the outskirts of New Columbus Circle and shares its address with the Grace & Mercy Foundation.
Hwang said in a 2017 video: “About five or six years ago, I encountered a lot of problems in the business, my journey really began.” “And I know one thing, that is under this situation. , Money and relationships don’t really help. But remind me in a certain way that I have to listen to God’s word.”
This belief helped Huang rebuild his financial empire at a dizzying speed, because the bank borrowed billions of dollars from him to increase his bets, and with the panic of the financial companies, these bets were huge. The ground collapsed. What followed was one of the largest margin calls in history, pushing its huge portfolio to the liquidation stage. Analysts at JPMorgan Chase & Co. said that some banks may end up in losses totalling up to $10 billion.
Leverage blowout: How Huang’s Archegos blinded global banks
When the injured Wall Street pointed the collective finger at Huang, his Christian accomplices gathered around him.
The honorary co-chair of the Lausanne Movement, Doug Birdsall (Doug Birdsall) is a global organization that aims to mobilize evangelical leaders. When meeting with him to discuss the new 30-story building of the American Bible Association in New York, Mr. Huang said: “Why build 30 stories? Make it 66 stories high. There are 66 books in the Bible.”
Before so many errors so quickly, Archegos seemed to be evolving rapidly. A year ago, Huang asked the US Securities and Exchange Commission (SEC) to allow him to work or operate a broker-dealer. The SEC agreed.
It is difficult to tell where Bill Hwang, the expensive financial speculator, ends, and where Bill Hwang, the Christian evangelist and philanthropist, begins. People who know him say that one person is inseparable from another. They said that although regulators are desperate, transaction losses are staggering, and market transaction issues are circumstantial, Huang Guangyu often says to bridge God and women and bring Christian doctrines into the money-centric Wall Street world.
“If you know Bill’s life, you will never think that this person is worth more than his current money,” said John Bai, the treasurer who has known Huang for 30 years. “Perhaps for some people, it was an epic disappearance of wealth, but he let God stand by his side. I don’t worry about Bill. He has nothing to do with money.”
For more articles like this, please visit Bloomberg.com.
Subscribe now to get the most trusted source of business news.
©2021 Bloomberg (Bloomberg LP)