Recently, Archegos Capital Management, a hedge fund structured family investment vehicle run by Tiger Management alumnus Bill Hwang, came under fire as it faced margin calls, and banks began liquidating billions of positions in blue-chip companies to protect themselves. As the fallout of this scandal continues, regulators have begun to place banks’ risk management systems under scrutiny, raising questions on whether some banks’ risk controls may have been insufficient, especially in a world of ultra-low interest rates and a hunger for yields.
To learn more about the role some banks possibly played in the Archegos fallout, Family Wealth Report spoke with Sam Sudame, a senior investment manager at WE Family Offices, for insight.
“I am surprised if the banks did not have a handle on their exposures,” Sudame tells the publication. “It is difficult to determine whether or not this saga points to systemic issues.” Regardless, Sudame notes that events like this do appear to occur every decade, once lessons from previous crises are forgotten.
