Who could have seen that coming?
"In 2012, New York-based hedge fund Tiger Asia Management pleaded guilty to using inside information to trade Chinese bank stocks, resulting in a massive settlement with US regulators. It marked a fall from grace for its founder Bill Hwang, one of the so-called “Tiger Cub” veterans of Julian Robertson’s Tiger Management fund. In theory Hwang might have found himself permanently blacklisted by investment banks everywhere.
But just 12 months after he was forced to return money to investors, Hwang was back in the game. He set up a secretive new family office called Archegos Capital Management. And soon many of the world’s top investment banks were fiercely competing for its business. Banks including Credit Suisse and Nomura on Monday warned investors and regulators that they face billions of dollars in losses from their dealings with Archegos after it defaulted on margin calls. Between them the banks had extended billions of dollars in credit to the family office to allow it to make highly-levered bets on US and Chinese stocks. As markets around the world digested the shock announcements, bankers and investors were left scrambling to answer a series of questions: why had banks bent over backwards to deal with a hedge fund manager with such a chequered history?"
https://www.ft.com/content/b7e0f57b-3751-42b8-8a17-eb7749f4dbc8
Why?
Commissions and bonuses, obvs.
"In 2012, New York-based hedge fund Tiger Asia Management pleaded guilty to using inside information to trade Chinese bank stocks, resulting in a massive settlement with US regulators. It marked a fall from grace for its founder Bill Hwang, one of the so-called “Tiger Cub” veterans of Julian Robertson’s Tiger Management fund. In theory Hwang might have found himself permanently blacklisted by investment banks everywhere.
But just 12 months after he was forced to return money to investors, Hwang was back in the game. He set up a secretive new family office called Archegos Capital Management. And soon many of the world’s top investment banks were fiercely competing for its business. Banks including Credit Suisse and Nomura on Monday warned investors and regulators that they face billions of dollars in losses from their dealings with Archegos after it defaulted on margin calls. Between them the banks had extended billions of dollars in credit to the family office to allow it to make highly-levered bets on US and Chinese stocks. As markets around the world digested the shock announcements, bankers and investors were left scrambling to answer a series of questions: why had banks bent over backwards to deal with a hedge fund manager with such a chequered history?"
https://www.ft.com/content/b7e0f57b-3751-42b8-8a17-eb7749f4dbc8
Why?
Commissions and bonuses, obvs.
