Soros buys stocks linked to Archegos implosion

Billionaire George Soros's investment firm snapped up shares of ViacomCBS, Discovery and Baidu (9888) 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 (HK$1.51 billion) of ViacomCBS, Baidu stock valued at US$77 million, as well US$46 million of Vipshop and US$34 million of Tencent Music Entertainment during the first quarter, according to a regulatory filing released 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 Hwang, fell apart during the last week of March after amassing large leveraged positions in a concentrated portfolio of US and Chinese companies. At its peak, the family office had more than US$20 billion of capital and total bets exceeding US$100 billion.

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, where the hit exceeds US$5 billion.

The 13F filing provides one of the first examples of how a hedge fund attempted to capitalize on the distressed remains of Archegos.

It also offers an insight into 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 returned almost 30 percent 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," Fitzpatrick, 51, said in a "Front Row" interview on Bloomberg TV.