For Hwang’s family office, now comes the inevitable: liquidation. Only months ago, it boasted holdings—built on borrowed money—valued at more than $120 billion. Today, everyone is lining up for the scraps.
The person handling the liquidation is David Pauker, the specialist who stepped in after Lehman failed during the 2008 financial crisis. More recently Pauker worked on the restructuring of Steinhoff International Holdings, the South African furniture retailer that nearly collapsed after an accounting scandal in 2017. He declined to comment on pending matters.
Across the river from Tenafly, at Hwang’s midtown Manhattan office, his landlord is suing Archegos for unpaid rent. Like building owners citywide, real-estate giant Vornado Realty Trust—run by billionaire Steven Roth—has been stung by the pandemic. It’s trying to recoup $159,165.55 from Archegos.
Hwang’s 38th-floor offices in the building across from Carnegie Hall have mostly been emptied, and his Christian charity, the Grace and Mercy Foundation, has decamped to a cheaper 22nd floor in the same building. The foundation had more than $600 million in assets as of 2019, according to its most recent tax filings. It had even more money in early 2021, according to a person familiar with the matter.
The size of Bill Hwang’s fortune remains uncertain. Former employees have been grousing that while they’ve been wiped out, Hwang, through private investments and other holdings away from Archegos, could still be a billionaire.
One such investment was the seed money he poured into four of Cathie Wood’s exchange traded funds that have exploded in popularity thanks to their market-beating returns.
Banks are haggling with Hwang’s team to figure out the size of his remaining wealth and whether they can claw back any of it. Credit Suisse has said it will seek to recoup money from Archegos and its related entities and individuals. The Swiss bank also flagged in its findings that Hwang’s firm took out more than $2 billion in excess margin from its account with the lender in the days before the collapse.
The Department of Justice has been moving ahead with a probe into the blowup. At least one line of questioning has revolved around the communication between Hwang’s top associate Andy Mills and the lenders, and whether he may have misled them in the week of the crash, according to a person interviewed by prosecutors.
“The assertion that Andy Mills or anyone at Archegos misled the banks during the week of March 22 is untrue in every respect,” a spokesman for Archegos said.
The Archegos debacle has fractured ties between Hwang and some former colleagues, who are fighting to recoup deferred compensation that was tied up with the firm. Part of their annual bonuses — which amounted to about $50 million—was invested alongside Hwang and rocketed in value with his portfolio, people familiar with the matter said. They want Hwang to carve out cash from money he may have set aside elsewhere.
One of Archegos’s employees has put his home in Manhattan and another on Long Island up for sale, according to real-estate listings.
Despite everything, Hwang is trying to push forward. He’s investing his remaining money, and occasionally crossing the Hudson to catch dinner at a New York restaurant. He spends spare hours as he has for much of his adult life: praying, reading Christian-themed literature, and listening to recordings of the Bible. He’s recently been reading “The Screwtape Letters” by C.S. Lewis, looking for guidance to navigating the current troubles. A satirical epistolary novel, the book features the demon Screwtape writing letters of advice to his nephew, Wormwood, who is trying to win the soul of a young man.
Others are trying to move on too. Hwang has promised to throw his weight, if not his money, behind at least three funds being launched by protégés. Hwang named his firm Archegos, an ancient Greek word for leader or author, a reference to Jesus. The names of two of the new funds reflect the cataclysm at Archegos. One is Red Ember Capital and the other is AriseN Partners.
This article was provided by Bloomberg News.