Archegos Blowup Claims Another Swiss Victim
UBS wants to move beyond its $860 million loss on Bill Hwang’s family offices, but investors deserve more of an explanation on what went wrong.
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For UBS Group AG, the world’s biggest wealth manager, a $774 million loss on one client may not have been material in what was otherwise a blockbuster first quarter. But the surprise hit from the implosion of Archegos Capital Management, revealed on Tuesday, raises deeper questions about the risk taking that underpins the firm’s growth in its investment bank and wealth businesses.
The Archegos charge didn’t lead to a collapse in UBS profit, nor did it cause investors to radically change how they view the company. Shares fell no more than 4% after the loss was announced. In the gray area of what constitutes a material event in a firm’s accounts, the loss probably didn’t meet the definition for requiring immediate disclosure.