Soros bought up stocks linked to Bill Hwang's Archegos implosion

New York

BILLIONAIRE George Soros's investment firm snapped up shares of ViacomCBS, Discovery and Baidu as they were being sold off in massive blocks during the collapse of Bill Hwang's Archegos Capital Management.

Soros Fund Management bought US$194 million of ViacomCBS, Baidu stock valued at US$77 million, as well as US$46 million of Vipshop Holdings and US$34 million of Tencent Music Entertainment Group during the first quarter, according to a regulatory filing released on Friday. A person familiar with the fund's trading said the company didn't hold the shares prior to Archegos's implosion.

Archegos, the family office of former hedge fund manager Mr Hwang, fell apart during the last week of March after amassing large leveraged positions in a concentrated portfolio of United States and China companies. At its peak, the family office had more than US$20 billion of capital and total bets exceeding US$100 billion.

Mr Hwang was wiped out in just days after investments including ViacomCBS and Discovery tumbled, triggering margin calls from global banks, who then sold the stocks in the big block trades. The fiasco is expected to cost the finance industry about US$10 billion, has prompted an investigation by the US Securities and Exchange Commission, and caused heads to roll at Credit Suisse Group where the hit exceeds US$5 billion.

The 13F filing provides one of the first examples of how a hedge fund attempted to capitalise on the distressed remains of Archegos. It also offers an insight into Mr Soros's investment firm, which is run by chief investment officer Dawn Fitzpatrick.

She told Bloomberg in March that she was willing to jump on dislocations in the market, investing US$4 billion during the pandemic-induced swoon a year ago, including buying residential mortgages on the cheap. Soros Fund Management returned almost 30 per cent in the 12 months through February and manages US$27 billion across a range of strategies.

"When there's a dislocation, we're prepared to not just double down but triple down when the facts and circumstances support that," Ms Fitzpatrick, 51, said in an interview on Bloomberg TV.

Soros Fund Management also increased its bet on Amazon.com and homebuilder DR Horton, which is now its second-largest public equity position.

The 13F, which money managers overseeing more than US$100 million in US equities must file quarterly, revealed that Soros Fund Management held US$4.5 billion of US equities, down US$77 million from the prior quarter.

The biggest exit in the quarter was Palantir Technologies. Soros Fund Management sold 18.5 million shares valued at about US$435 million. The firm originally revealed it owned a stake in the controversial data-mining company controlled by Peter Thiel in November, but rapidly issued a statement saying the original investment was made in 2012 and it regretted the decision. BLOOMBERG