Nobody knew Christian trader Bill Hwang – until he lost billions

When it comes to Christians who rise and fall in a way that grabs the world’s attention, Bill Hwang is one of the most memorable. But you still might not have heard of Hwang, even though his meteoric plummet happened less than one month ago.

Check out any financial website since late March, though, and ‘Bill Hwang’ appears. The reason is obvious when you discover that this wealthy Wall Street investor and son of a pastor might have lost somewhere between $US200 and $US100 billion. In a matter of days.

Hwang’s Archegos Capital Management was not just a workplace where its boss hosted Bible studies at 7am on a Friday. Archegos – a Greek word for ‘prince’ or ‘leader’, with biblical links to Jesus Christ – managed money for a few families, including a reported $US10 billion of Hwang’s own.

As The Wall Street Journal summarised: “The firm used borrowed money to buy substantial stakes in media and internet companies, including ViacomCBS. That position went south [in late March] after Viacom’s share price dropped, prompting Wall Street firms that had invested in Archegos to demand it make up some of those losses.”

When the ViacomCBS shares tanked, Hwang’s position collapsed because he had become its “single largest institutional investor”. Archegos defaulted, so stocks linked to it were liquidated fast, as other financial institutions raced to control the damage.

While no-one is accusing Hwang of illegal activity, the US Securities and Exchange Commission is investigating and money-making types appear shocked by the enormity of Archegos’ losses. Part of it stems from Hwang being largely unknown, running a family business that does not face the same scrutiny or regulations as firms which deal with external money.

As reported by the Australian Financial Review, “Hwang has [laid] low, issuing only a short statement calling this a ‘challenging time’ for Archegos.”

“I cannot think of another foundation or individual that has given significant donations to as many Christian organisations as [Hwang] has.” – Warren Cole Smith

It must also be challenging for The Grace and Mercy Foundation, a Christian charity started by Hwang which is one of the USA’s largest. With a reported $US470 million in assets, Grace and Mercy is the most glaring witness to Hwang’s personal faith.

“I cannot think of another foundation or individual that has given significant donations to as many Christian organisations as he has,” Warren Cole Smith told The Washington Post. Smith leads MinistryWatch, which monitors the finances of Christian ministries.

According to Forbes, Hwang has put about $US590 million into the foundation, which has contributed millions to Christian not-for-profits or institutions such as Fuller Theological Seminary, Washington DC’s Museum of the Bible, Tim Keller’s Redeemer Presbyterian Church – and Ravi Zacharias International Ministries.

“When we create good companies through the capitalism that God has allowed, it enhances people’s lives … God delights in those things,” Hwang said in 2019, in a Grace and Mercy video here.

“I invest with God’s perspective, according to his timing.”

Described in the past few weeks as a Christian capitalist and part of a “faith in finance movement”, Hwang made his recent fortune fast through taking big risks – while living in a relatively modest home and not seeking the spotlight.

The son of a South Korean pastor, Hwang moved to Las Vegas when he was a teen. He learned to speak English while working at McDonald’s and further studies in finance brought him to the attention of “hedge fund legend” Julian Robertson in the late 1990s.

“Hwang has shared this story as a ‘come to Jesus’ moment …”

Hwang helped Robertson break into Korean markets and things were going super-profitably until big losses in 2008. Then, in 2012, Hwang’s Tiger Asia firm pleaded guilty to “wire fraud”. According to Bloomberg: “The [Securities and Exchange Commission] said the firm used inside information to trade in shares of two Chinese banks. Hwang and his firm ended up paying $60 million to settle the criminal and civil charges.

“The SEC banned him from managing outside money and Hong Kong authorities prohibited him from trading there for four years (the ban ended in 2018).”

People close to Hwang told The Washington Post that since then “he has shared this story as a ‘come to Jesus’ moment, where he would say that he had a sort of spiritual awakening after being caught by the SEC”. Also quoted is Rick Mouw, a former president of Fuller Theological Seminary, who brought Hwang on the Fuller board after successful investments for the college.

“I have talked a lot with Bill about ethical and spiritual challenges in his work,” Mouw told The Washington Post. “I’ve always found him to be very eager to think in Christian ways.”

Before the SEC ban ended, Hwang was able to return to Wall Street – as a trader for a family firm, not a major hedge fund. But his eye-watering loss a few weeks ago throw serious doubt about what sort of comeback Hwang might yet make in the world of high finance.

“While reading the Bible, I realised that God likes setting a fair value,” Hwang described his approach to investing, in 2019.

“Helping companies establish an appropriate market price by making investments, and supporting them to do well, is all part of God’s work.”

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