By: Natasha Archary
Bill Hwang, is the Wall Street investor who has gone from riches to rags after losing $20 billion in 2 days. The CEO and founder of Archegos Capital Management was on track to become one of the wealthiest investors in the world.
According to Bloomberg, Hwang “amassed one of the world’s great fortunes in virtual secrecy – and then lost it, very publicly, in a blink.”
Growing Archegos’ value to more than $120 billion earlier this year, Hwang’s fortune was predominantly liquid which set him apart from other billionaires. Without any actual assets such as properties, art or business Hwang’s winning streak came to a screeching halt.
A man of faith, Bill Hwang is still trying to piece together where it all went wrong. The South Korean immigrant started his career at Hyundai Securities, New York where he was introduced to hedge fund billionaire Julian Robertson.
He soon became Julian’s protegé and when Robertson’s Tiger Management closed in 2000, Hwang started his own fund with $25 million and launched Tiger Management Asia.
In 2012, the 57-year old was charged for insider trading but placing bets on multiple blue-chip companies saw the share price on Archegos growing.
Until March this year when Archegos failed to meet a margin call which resulted in the value of assets falling to an all-time unacceptable level. This pushed fire sales of assets which brought on lower returns on investment and basically meant Hwang’s company had to cash inject more funds into its accounts.
When he couldn’t, investment banks were forced to sell their shares to minimise their loss and within 2-days Hwang was under $20 billion.
Archegos was liquidated and many companies were hit hard and were forced to downscale due to the after-effects. Credit Suisse was quite possibly the worst hit, taking a $5.5 billion knock.