Traders prepare for sale of shares linked to Archegos

Archegos Capital, a private investment firm, was behind billions of dollars in stock sales that captivated Wall Street on Friday – a Fiery sale This has left traders scrambling to calculate how much they have left to unload, according to people familiar with the matter.

The fund, which was heavily exposed to ViacomCBS and several Chinese tech stocks, was hit hard after shares of the US media group began to fall on Tuesday and Wednesday.

The declines prompted a margin call from one of Archegos’ main brokers, triggering similar demands for liquidity from other banks, people familiar with the matter said. Traders buying the large blocks of shares have been told that the sales of shares were caused by a fund’s “forced deleveraging”.

Archegos is a family office that manages the wealth of Bill Hwang, a former “Tiger cub” student at Julian Robertson’s legendary hedge fund, Tiger Management.

The company’s website is no longer available and the company has not returned multiple requests for comment. The fund’s chief trader in New York hung up the phone when contacted by the Financial Times.

New York-based Hwang previously ran hedge fund Tiger Asia, but returned liquidity to investors in 2012 when he electronic fraud admitted relating to Chinese bank stocks.

Hwang paid $ 44 million in fines to pay illegal trading fees with the Securities and Exchange Commission in 2012, and in 2014, it was banned from trading in Hong Kong. He did not respond to multiple requests for comment.

Friday’s sales cost companies involved an estimated $ 33 billion, including Chinese tech stocks and US media groups, as Goldman Sachs and Morgan Stanley sold blocks of shares worth $ 19 billion. dollars at discounted prices throughout the day. Other funds may also have participated in the sale, according to people familiar with the trades.

Archegos manages its own money and has no outside investors, but its pressing need to offload large stakes in multiple companies is rippling through stocks in Asia and elsewhere, inflicting losses on other stock holders.

For these other investors, the question now is whether the fire sales are over. Some traders say the recent sales pattern, which lasted for several days but peaked on Friday, suggests the bulk of it is over. Others believe that the scale of leverage that Archegos appears to have used means that billions of dollars in positions could still be sold.

Archegos describes itself as a “determined community of investment industry professionals,” according to an archived version of its website.

His name is a biblical Greek word meaning ruler, ruler, or prince, used in connection with Jesus. In a 2018 Youtube video, Hwang said his investments were “not just about money,” adding that “God certainly has a long-term view.”

“We love to see firsthand what and how God is doing through investment and capitalism. . . it can be done better, ”he said.

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