In the months since the implosion of Archegos, the family office that saddled a coterie of banks with billions of dollars in losses after its heavily leveraged swap positions went sour, founder Bill Hwang has been living a low-key life in the New Jersey suburb of Tenafly, a decidedly modest home for a man who some suspect may still be a billionaire, even after the bulk of his fortune evaporated with Archegos.
David Pauker, the same liquidation specialist who presided over Lehman's bankruptcy during the financial crisis, has been tapped to preside over the wind-down of any of Archegos's remaining assets. Still, Bloomberg reports that Archegos's bankers are scrambling to discern whether Hwang has any outside wealth that they can claw back to offset their losses related to Archegos.
While his former employees put their (multiple) homes on the market while griping about bonus money they foolishly left in Hwang's hands (to be invested alongside the rest of his firm's money), Bloomberg reports that Hwang has been laying low in New Jersey. For the first time since the blowup, he appears to have spoken to reporters - a team from Bloomberg - confirming that he is already planning his comeback, while still working to contain the fallout from Archegos.
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.
When a neighbor was informed about Hwang's recent losses, they responded incredulously: "Billion with a B?"
Unfortunately for Hwang, there's still a chance that prosecutors could bring criminal charges against him. Credit Suisse claimed in its recently released report that Hwang and Archegos likely "deceived" CS about the true extent of its positions with rivals, and even withdrew billions of dollars in collateral days before the blowup.
US 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?
The DoJ is reportedly investigating whether Hwang or one of his lieutenants misled lenders during the days leading up to the crash.
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.
Although Hwang declined to discuss Archegos with the Bloomberg reporters, he confirmed that he has been laying low in Tenefly, roughly 15 miles from Manhattan. His preference for a low profile is understandable: across the Hudson River, Archegos's landlord is suing for nearly $160K in unpaid rent.
Meanwhile, Hwang is trying to move forward, reading the Bible (and Christian-themed literature like CS Lewis's "The Screwtape Letters". He occasionally travels into the Big Apple for a business dinner.
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.
He's already reportedly promised to throw his support behind three funds being launched by former Archegos personnel. The names of the funds all hint at the theme of resurrection (in keeping with Hwang's Christian views): One fund has reportedly taken the name Red Ember Capital, and the other is calling itself AriseN Partners.