Bill Hwang was on track to becoming one of the wealthiest investors in the world – until he lost US$20 billion in two days.
The astronomical loss of Archegos Capital Management cemented the Wall Street investor as one of the only people in the world to lose so much money so quickly.
“He amassed one of the world’s great fortunes in virtual secrecy – and then lost it, very publicly, in a blink,” Bloomberg stated.
Archegos’ valuation reportedly grew to more than US$120 billion earlier this year. Because Hwang’s fortune was mainly liquid, it set him apart from other billionaires (whose wealth generally sits in businesses, properties and art). Had he cashed in weeks earlier, the story would be entirely different.
However, in the six months that have passed, bankers and authorities are still sifting through the financial ruins, Bloomberg explains. Meanwhile, Hwang has reportedly kept a low profile, occasionally spotted chauffeuring his family around town.
So who exactly is Hwang?
Immigrating from South Korea to the US in 1982, the veteran investor had a humble upbringing. His father was a pastor and his mother was widowed when Hwang, whose full name is Sung Kook Hwang, was a teenager.
“He was a wonderful guy, never yelled at me,” Hwang said about his father in 2018.
Beginning his career at Hyundai Securities in New York, he went on to work at the investment company Peregrine (which became defunct in 1998). There he met billionaire hedge fund manager Julian Robertson and went to work for Robertson’s Tiger Management, soon becoming one of the billionaire’s most successful proteges – known as Tiger Cubs.
After Robertson closed the fund in 2000, Hwang used US$25 million to launch his own fund, Tiger Asia Management.
Despite his own soaring wealth, which reportedly sat around US$30 billion at its peak, the devoted Christian’s modest upbringing ripples through his family’s life – right down to his suburban home in New Jersey.
While slipping under the radar for the most part of his investment career, the 57-year-old has a chequered past. In 2012, he was charged US$44 million for insider trading.
From that moment, Hwang slowly worked back the trust of global banks where he founded his family office, Archegos, in 2013. Guided by his faith, Hwang’s business decisions are shaped by the bible, and the name of his family office is no different: Archegos means ‘one who leads the way’.
“I’m like a little child looking at what I can do today, where can I invest to please our God,” Hwang told Fuller Studio in 2018.
Through making big bets on US blue chip tech companies, Archegos grew rapidly. More recently, the family office was making riskier investments in companies including media conglomerate ViacomCBS and US-listed Chinese stocks.
What ultimately led to “one of the most spectacular failures in modern financial history” was one particular moment in late March 2021.
Archegos failed to meet a margin call, which was triggered by the total value of assets falling below an acceptable level. This resulted in fire sales of assets, consequently flooding the market and leading to lower returns for investment banks. To solve the problem, Archegos was required to inject extra cash into its accounts. When it failed to top up the accounts, the investment banks sold shares and assets from the family office in order to minimise further losses.
Credit Suisse was among some of the hardest hit. In what would have been its best quarterly performance in at least a decade, the Swiss bank was struck by a US$5.5 billion blow. It was forced to cut bonuses and let go of key executives while it also prompted regulatory investigation by financial watchdog Finma, according to The Guardian.
Liquidation is one of the only choices left for Archegos. However, Hwang still has his Christian charity Grace and Mercy Foundation.
“It’s not all about money, it’s about [the] long term,” he told Fuller Studio in 2018. “God certainly has a long-term view and it’s really helping a lot of people learn to invest well and use capitalism to help human society advance.”
