Home » Business » Archegos’ Bill Hwang created wealth at a historic pace before losing it all a FOX Business investigation shows
Archegos’ Bill Hwang created wealth at a historic pace before losing it all a FOX Business investigation shows
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Easy come, easy go.
Before his epic collapse this week losing an estimated $8 billion or possibly in 10 days, hedge fund trader Bill Hwang increased the size of his fortune a staggering 900% or more in just seven years. For the man behind Arcehgos Capital Management, it may be one of the fastest creations and destructions of wealth in recent history, FOX Business has learned.
FOX Business was able to trace the growth in Hwang's personal fortune — which Wall Street sources say largely consisted of the money he traded at Archegos — to a research report compiled by the philanthropy consulting group Jerold Panas, Linzy & Partners, Inc for a Christian college that was seeking donations from Hwang.
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About seven years ago, The King’s College was looking for wealthy donors to support its vision for an Evangelical Christian institution of higher learning in Manhattan. The college commissioned the consulting firm to help it estimate the net worth of someone who, on paper at least, checked all the right boxes.
Hwang, a long-time hedge fund trader was both wealthy, and prominent in raising money for Evangelical institutions and causes. The consulting firm’s report, completed around 2014, estimated Hwang's fortune at less than $1 billion, according to a person with direct knowledge of the matter.
“He was clearly wealthy but not as wealthy as other donors we were trying to bring on board,” said the person, who was a senior administrator at the college.
It wouldn’t be long before Hwang became one of the school’s wealthiest donors. Just before Archegos’s epic collapse in late March, Hwang was managing a portfolio valued at between $10 billion and $15 billion, Wall Street traders estimate. Most if not all of it was his own money, making him one of the world’s richest people.
Larry McDonald, a former Wall Street trader and creator of the "Bear Traps Report," an investment newsletter for hedge fund professionals, estimates that Hwang must have been compiling annual returns of 35% or more to see such an explosion in assets under management.
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That would put Hwang, according to McDonald, up among some of the biggest and best traders on the street — before his blowup.
"If those numbers are accurate, they are truly astounding," McDonald said. "What makes it even more impressive is that he was doing so well at a time when hedge funds hit a rough patch and were losing favor to passive investments.
McDonald added that “the only way you can produce those types of numbers so quickly is to use lots of leverage and be right most of the time. Just as astounding, he gave it all back in an instant.”