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Matt Levine

Archegos Analyst Wants His Money Back

Also Russian assets, universal owners vs. labor and KYC/SOW.

Here’s an amazing trade, if you can get it. Archegos Capital Management, the family office of Bill Hwang, had a hugely successful run followed by a disastrous collapse in March 2021. (We talked about it here, here and here.) Archegos’s assets grew from about $4 billion in 2020 to roughly $36 billion on March 22, 2021; by March 29 they were roughly zero. If you had money in Archegos — and you didn’t, it was a family office running mainly Hwang’s own money — then you had enormous paper profits as of March 22, and nothing as of March 29. But what if, on March 30, you could look around at the rubble and decide to withdraw what you had in the fund as of March 22? That would be pretty good, right? 

Archegos did not only run Hwang’s money. It employed a number of investment professionals, though it is a little unclear what they did all day; by the end of Archegos’s run it seems that Hwang was mostly just buying a dozen stocks as fast as he could without consulting with his analysts. But he did employ analysts, and he paid them millions of dollars a year, and like many hedge-fund analysts they took some of their pay in cash and some of it in shares of the fund. So apparently about $500 million of Archegos’s money, just before the end, belonged to its employees.