Matt Levine’s Money Stuff: Bill Hwang’s Rise and Vicious Fall

Archegos

Here is a simplified version of the Archegos story. Archegos Capital Management was a family office run by Bill Hwang, a former Tiger Cub hedge fund manager, that invested his personal fortune. Starting in about 2020, Archegos’s investment strategy consisted of buying a whole ton of shares of like 10 stocks, using mostly money borrowed from about a dozen banks. (Technically it did this buying using total return swaps rather than actually buying the stocks on margin, but that is a minor point.)

As Archegos kept buying more of these stocks, they went up, because generally if you ...