In March 2021, global markets were shaken by the sudden collapse of Archegos Capital Management, a little-known family office run by investor Bill Hwang. In just a matter of days, Archegos imploded, triggering over $10 billion in losses for major banks and erasing more than $100 billion in stock market value.
The event exposed hidden weaknesses in modern finance: excessive leverage, opaque derivatives, and inadequate risk management by some of the world’s biggest institutions.
This article explores Bill Hwang’s background, the rise of Archegos, how the meltdown unfolded, who lost money, and the lessons it holds for Wall Street.
Who Is Bill Hwang?
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Born Sung Kook Hwang in South Korea in 1964.
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Immigrated to the U.S. and studied economics at UCLA and an MBA at Carnegie Mellon.
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Early career at Hyundai Securities and Peregrine, before joining Tiger Management, the hedge fund founded by Julian Robertson.
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Became one of Robertson’s top “Tiger Cubs,” earning a reputation as a savvy stock picker, particularly in Asian markets.
In 2001, Hwang founded Tiger Asia Management, a hedge fund focusing on Asian equities.
From Tiger Asia to Archegos
Tiger Asia’s Rise and Fall
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Managed billions at its peak.
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In 2012, Hwang and Tiger Asia admitted to insider trading and wire fraud involving Chinese bank stocks.
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Paid $44 million in fines; Hwang was banned from managing public money in Hong Kong.
Archegos Capital Management
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After closing Tiger Asia, Hwang converted it into a family office—a private investment vehicle managing his personal fortune.
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Based in New York, Archegos quietly grew to manage tens of billions of dollars.
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Because family offices face less regulation than hedge funds, Archegos operated under the radar.
Archegos’s Strategy
Archegos used a combination of concentrated bets and extreme leverage to supercharge returns.
1. Total Return Swaps
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Archegos used derivatives called total return swaps to gain exposure to stocks without directly owning them.
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A swap allowed Hwang to enjoy the gains (or losses) of a stock while posting collateral to a bank.
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This kept Archegos’s actual positions hidden from public view.
2. Massive Leverage
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With swaps, Archegos could leverage its capital many times over.
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Estimates suggest it controlled positions worth $50–100 billion on just a fraction of that in equity.
3. Concentrated Positions
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Heavily invested in a handful of media and tech stocks:
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ViacomCBS
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Discovery Inc.
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Baidu
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Tencent Music
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GSX Techedu (a controversial Chinese education stock)
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Such concentrated exposure left Archegos extremely vulnerable.
The Meltdown
The Trigger
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In March 2021, ViacomCBS announced a large stock offering.
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Its shares, heavily owned by Archegos, began to fall.
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Margin calls followed: banks demanded Archegos post more collateral.
The Domino Effect
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Archegos couldn’t meet collateral demands.
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Banks holding its swaps—Credit Suisse, Nomura, Morgan Stanley, Goldman Sachs, and others—rushed to liquidate positions.
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A fire sale of billions in stock sent prices crashing further.
The Collapse
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Within days, Archegos was destroyed.
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Banks collectively lost over $10 billion, with Credit Suisse alone losing $5.5 billion.
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Market value wiped out across its holdings exceeded $100 billion.
Who Lost What?
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Credit Suisse: $5.5B loss; reputational damage; forced executive resignations.
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Nomura (Japan): $2.9B loss.
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Morgan Stanley: $911M loss.
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UBS: $861M loss.
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Goldman Sachs & Deutsche Bank: Avoided major losses by exiting quickly.
Hwang’s personal fortune, once estimated at $20 billion, was nearly wiped out overnight.
Why Didn’t Regulators See It Coming?
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Family Offices Exemption: Archegos, as a family office, avoided the reporting requirements hedge funds face.
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Opaque Derivatives: Total return swaps hid the true size of its positions.
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Risk Blindness by Banks: Multiple banks extended leverage without realizing how concentrated and overlapping Archegos’s trades were.
The collapse revealed a regulatory blind spot in global markets.
Legal Fallout
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In April 2022, Hwang and Archegos’s CFO were indicted on charges of fraud and racketeering.
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Accused of lying to banks to obtain more leverage and manipulating stock prices.
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Both pleaded not guilty; trials remain ongoing as of 2025.
Regulators are considering stricter oversight of family offices and derivatives to prevent another Archegos-style collapse.
Why Did Banks Take the Risk?
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Competition for Clients
Banks competed aggressively to win Archegos’s trading business. -
Fee Incentives
Total return swaps generated lucrative fees. -
Overconfidence
Hwang had a history as a skilled stock picker, giving banks a false sense of security. -
Weak Coordination
Each bank saw only its own exposure, not the full picture of Archegos’s leverage.
Comparisons to Other Financial Disasters
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Long-Term Capital Management (1998): Another highly leveraged fund that collapsed when bets turned sour.
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Nick Leeson & Barings Bank (1995): One trader’s hidden bets destroyed a centuries-old bank.
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Jérôme Kerviel & Société Générale (2008): $7B loss from unauthorized trades.
All highlight the same theme: leverage and lack of transparency can be deadly.
Lessons from Archegos
For Banks
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Improve transparency and information sharing.
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Enforce stricter margin requirements on leveraged clients.
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Don’t let competition blind risk management.
For Regulators
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Reassess exemptions for family offices.
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Increase oversight of derivatives like swaps.
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Close reporting loopholes.
For Investors
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Beware of hidden leverage in markets.
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Concentrated bets can make fortunes—but also destroy them.
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Reputation is no substitute for transparency.
Bill Hwang: Genius or Gambler?
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Supporters say: He was a skilled investor who made concentrated, high-conviction bets.
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Critics say: He was reckless, hiding behind swaps to gamble with excessive leverage.
The truth lies somewhere in between: Hwang was a talented stock picker who let leverage and opacity turn his family office into a ticking time bomb.
The Bigger Picture
The Archegos collapse was not just about one man. It was about a financial system that allowed hidden leverage to build unchecked.
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Exposed fragility of prime brokerage relationships.
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Highlighted how one private fund could shake global markets.
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Showed that 2008’s lessons about transparency and leverage remain unlearned in some corners of finance.
Conclusion
Bill Hwang’s Archegos meltdown is a cautionary tale for Wall Street. It shows how even in a heavily regulated system, hidden risks can build in the shadows, only to erupt suddenly with devastating consequences.
For Hwang, the collapse destroyed his fortune and reputation. For banks, it caused billions in losses. For regulators and investors, it raised urgent questions about transparency, leverage, and systemic risk.
The lesson is simple: when leverage is hidden and oversight is weak, disaster is only a margin call away.
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