Up in smoke within days

By all accounts Bill Hwang led a modest existence, living in a house in suburban New Jersey and driving a Hyundai SUV, devoted to his church and his family. He had worked at Tiger Management, Julian Robertson’s hedge fund. When that closed Robertson seeded Hwang to set up Tiger Asia Management, which peaked at around $10bn under management before he was accused of insider trading and pleaded guilty to wire fraud. In 2013 he set up Archegos as a family office to manage his own money, around $200m at the time, and that’s when the fun started.

By mid-March, using swaps and a ton of leverage on a highly concentrated portfolio, he had very quietly built a fortune of $20bn, with which he gave generously to his Grace & Mercy Foundation to support Christian causes. What his bankers didn’t know until they got together in late March was that his portfolio was up to five times leverage, so that when one of its big bets in Viacom went sour, the whole $20bn went up in smoke in a couple of days.

As a Christian, Hwang could console himself with the Matthew 19 routine about it being easier for a camel to get through the eye of a needle than for a rich man to enter the kingdom of heaven.

But it has certainly been brutal for his lenders, whose losses are so huge that heads have been rolling at a rate that would be familiar to fans of the French Revolution.

Family offices are generally designed to preserve wealth over generations, but that is a memo

Hwang clearly didn’t get.