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Cathie Wood has revealed that Bill Hwang, the investor whose family office Archegos Capital blew up causing billions of dollars in losses, played a central role in the launch of its asset manager Ark Invest.
In a TV interview on Friday, Wood he also said he had exchanged ideas with Hwang about US equities and, in particular, about the media sector in 2013, when Archegos was still primarily focused on investing in Asia.
Wood created Ark, which works change traded funds focused on innovative technology companies, in 2014 after a long career on Wall Street at AllianceBernstein and Jennison Associates.
“He [Hwang] provided the seed for our first four ETFs and we were very grateful to him. It was at a time when market makers were fed up with planting new strategies, because they would be stuck with $ 2 million trapped in an ETF that goes nowhere, ”he told CNBC.
“We had to go out and look for that seed and Bill, hearing what he was saying about the company that would start. . . she was very intrigued and very intrigued by the actions that interested us, “she said.” I was just beginning to learn about them. “
A fierce rally of technology stocks has helped propel Ark into the top ten U.S. ETF managers and investors have invested money in their funds. The flagship innovation fund now has $ 22 billion in assets. The other three Ark funds planted by Hwang are its Genomic Revolution, next-generation Internet, and autonomous technology and robotics funds.
Wood, as Hwang a devout Christian, who christened Ark with the gold-covered chest described in the Book of Exodus, said he met with the former hedge fund manager when they were both advisers to a religious group that ministered to young people. on Wall Street.
“When we came back from that event, at the time we were exchanging ideas about stocks and I know he bought into one of the stocks we had a high degree of trust in, Netflix,” Wood said.
Banks acting as the main broker Archers suffered losses of $ 10 billion in late March after Hwang’s highly leveraged bets on a small number of U.S. and Chinese stocks turned against him, including media group ViacomCBS.
When asked if Hwang still owned a stake in any of Ark’s funds, Wood said the ETFs don’t know who his shareholders are and added, “I never asked him if he kept the money. If he wanted to be volunteer, I could have but, no, we never had that conversation. “
Several banks are seeking compensation after suffering losses related to derivative transactions Archers, which the Financial Times reported this week that it was preparing for insolvency. Washington stock regulators are investigating the debacle.
Wood said he had not spoken to Hwang since Archegos exploded. “I sent him a note after hearing about the unfortunate events we have all witnessed and I wish him well,” he told CNBC. “He was there for us for the first few days and we are very grateful to him.”
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