8/3/2023 0 Comments Tiger cub archegos liquidation![]() ![]() It looks to have been at least four times what a long/short equity fund would normally get.”īankers in Tokyo familiar with the circumstances surrounding the heavy sell-off of Archegos assets described the event as a possible “Lehman moment” that would force multiple lenders to recognise that leverage extended to the fund had created excessive risk. Hideyasu Ban, an analyst at Jefferies, said a $2bn loss estimate logged in the March quarter would wipe out most of Nomura’s pre-tax profits for the second half of the financial year ending this week.Īn executive at a global hedge fund in Hong Kong said: “It is surprising that a China-oriented fund was using Nomura and being granted so much leverage by a Japanese bank. Teng Yue was not immediately available for comment. ![]() Teng Yue, run by fellow Tiger cub Tao Li, has also been linked to the sell-off that hit shares in US media groups and Chinese technology business GSX Techedu last week, according to prime brokers and traders in Hong Kong. Hedge funds in Hong Kong and Tokyo said traders were braced for further block sell-offs in stocks associated with Archegos and other funds that could also be forced to unwind heavily leveraged positions, such as Teng Yue Partners. UBS declined to comment.ĭeutsche Bank said it had “significantly de-risked” its exposure to Archegos and did not expect to incur any losses as it unwound remaining positions. UBS’s exposure is not material, said a person briefed on the matter. The banks were among at least five, including UBS, that supplied prime brokerage services to Archegos, according to people familiar with the matter. Other prime brokers that provided leverage to Archegos said the problems at Nomura and Credit Suisse related to being slower in offloading share blocks into the market compared with their peers, notably Goldman Sachs and Morgan Stanley.Īn executive at a Wall Street bank in Hong Kong said: “It is unclear why Nomura sat on their hands and racked up these large losses.” One Tokyo-based banker said the extremely high level of leverage Nomura appeared to have extended to Archegos was “baffling”. New York-based Hwang previously ran the Tiger Asia hedge fund, but he returned cash to investors in 2012 when he admitted to wire fraud relating to Chinese bank stocks. It had about $10bn of assets last week, according to prime brokers. Finma, the Swiss financial regulator, said Credit Suisse had made it aware of its involvement in an “international hedge fund case” involving “several banks and locations internationally”.Īccording to people familiar with the matter, Nomura held emergency talks with Japan’s Financial Services Authority before disclosing its exposure on Monday.Īrchegos is a family office that manages the wealth of Hwang, a “Tiger cub” alumnus of Julian Robertson’s legendary Tiger Management hedge fund. ![]()
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