A forced hedge fund liquidation that started last week hit global investment banks Credit Suisse and Nomura on Monday after they warned of financial troubles …
A forced hedge fund liquidation that started last week hit global investment banks Credit Suisse and Nomura on Monday after they warned of financial troubles as a result of the blowup. Nomura shares fell a record 16 percent on Monday as Credit Suisse’s shares dropped 15, its biggest fall since the pandemic struck last March. Credit Suisse’s plunge came after it warned of a “highly significant and material” hit to its first quarter results tied to trouble at a “US-based hedge fund” that the Wall Street Journal has identified as Archegos Capital management, led by Bill Hwang, a former protégé of hedge-fund titan Julian Robertson. The unnamed hedge fund “defaulted on margin calls made last week by Credit Suisse and certain other banks,” the Zurich-based bank said Monday. “Following the failure of the fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions.” Japanese-based Nomura also warned a financial hit tied to $2 billion its owed by a US client, which reports have identified as Hwang’s Archegos. The warnings come as the Journal reports on a forced liquidation of Hwang’s hedge fund, which has triggered stock selling on a mass scale valued at $30 billion since last week. On Friday, the hedge fund implosion pulled down major US media companies ViacomCBS and Discovery, sending shares tumbling 27 percent, marking their biggest declines ever.
