He sits on the porch in a white plastic chair, a swing set out back, the lawn freshly mowed.
Here in suburban Tenafly, 15 miles from midtown Manhattan, few would guess that this unassuming figure is none other than Bill Hwang—the man who just lost more than $20 billion.
“Billion with a B?” gasps a neighbor down the block, when told of the epic blowup at Hwang’s Archegos Capital Management.
Yes, billion, with a B, as shocked lenders can attest. Four months after Archegos rocked global finance, bankers and federal authorities are still sifting through the wreckage. The liquidator who mopped up after Lehman Brothers has now come for Archegos. Some colleagues have turned on Hwang; others hope he’ll bankroll hedge funds that might yet rise from the ashes.
U.S. prosecutors are asking questions, too, including the big one: Was all of this another spectacle of Wall Street greed and hubris, or was it something worse? Credit Suisse Group AG, staggered by a $5.5 billion blow, says it was likely deceived by Hwang’s family office.
Hwang is groping for answers of his own. He amassed one of the world’s great fortunes in virtual secrecy—and then lost it, very publicly, in a blink. In the easeful heat of this summer morning, he’s awaiting a call with a retired U.S. general who, he hopes, might provide some counsel. He’s dressed like your average American soccer dad: teal shirt, blue cargo pants, Adidas slides. He has a pad of paper and a pen handy. An 8-ounce plastic bottle of Poland Spring water stands on the white plastic table which, like the chair, could have come from Costco.
At hand, too, is a Christian pamphlet—a testament to the faith that’s guided Hwang as he made dangerous bets in the markets and was even charged with insider trading in the past. The title is Armor of God, a reference to Ephesians 6:11—“Put on the full armor of God, so that you can take your stand against the devil’s schemes.”
Hwang is relaxed, self-deprecating and reflective in a brief conversation, but declines to discuss the Archegos fiasco or his next steps. He’s been lying low here in New Jersey, in this tidy borough of 15,000, beyond The Palisades cliffs that rise above the Hudson River. He is not exactly a Wall Street Napoleon exiled to Elba: Hwang has lived here for years, in the same house, with cobwebs in the eaves and hedges out front. A Mercedes sits in the driveway. “Black Lives Matter” signs dot neighbors’ manicured lawns. Homes on this tree-softened street tend to sell for a few million dollars—a modest price, for a billionaire.
It’s difficult to square Hwang’s mostly unglamorous life here with the portrait of him that has emerged over the past few months. By all accounts he eschews the trappings of extravagant wealth. At the Tenafly Classic Diner, where the “NJ Sandwich” goes for $6.95, the servers say he’s been known to stop by, but haven’t seen him lately. More recently he’s been chauffeuring his family around town, in between coping with one of the biggest debacles in Wall Street history.
Credit Suisse provided the first official peek into the flameout. A 172-page autopsy, released publicly on July 29, exposed a litany of management failures at Credit Suisse. But the embattled lender also says “it seems likely that Archegos deceived CS and obfuscated the true extent of its positions, which Archegos amassed in the midst of an unprecedented global pandemic.”
This account also hints at a shift in Hwang’s strategy that has baffled outsiders. Archegos had grown rapidly by making huge bets on established FAANG stocks—blue-chip U.S. technology companies. But by last year, it was plowing money into risker bets like ViacomCBS and several U.S.-listed Chinese stocks, some of which had been targeted by short sellers.
When the banks began dumping Hwang’s portfolio, these shares tumbled. And a more recent crackdown by the Chinese government has further decimated many of Hwang’s favored bets.