- Archegos is preparing for insolvency as banks seek to recoup losses suffered during the meltdown, the Financial Times reported Wednesday.
- The family office has reportedly hired restructuring advisers to tackle financial and operational obstacles.
- Some of the banks are drafting “letters of demand” in which they are requesting repayment from Archegos before filing legal claims.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Archegos Capital Management is reportedly preparing for insolvency as banks seek to regain roughly $10 billion in combined losses suffered during the meltdown in March, the Financial Times reported Wednesday.
According to the report, Bill Hwang’s family office has hired restructuring advisers to navigate financial and operational obstacles as well as the potential legal claims from the banks involved.
Credit Suisse, Nomura, Morgan Stanley, UBS, MUFG, and Mizuho all lost billions each after Bill Hwang’s family office failed to meet margin calls on highly levered positions in a handful of stocks.
As a result, some of the banks are drafting “letters of demand” to the firm requesting repayment before filing legal claims, according to the Financial Times.
On Wednesday, UBS Group Chairman Axel Weber apologized for the loss the bank suffered amid the Archegos fiasco in an interview with Bloomberg TV.
Weber blamed the episode on a lack of oversight of family offices, which do not have to disclose as much information about investments to regulators compared to other asset managers, such as hedge funds.