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Europe ’ s UBS and Deutsche Bank , also had close ties with the family office but all four were reportedly much quicker out of the gate in exiting the fund ’ s positions that fateful week .
As Credit Suisse and Nomura admitted mistakes in their handling of the Archegos saga , Goldman Sachs boasted record average balances in its prime business in the first quarter 2021 as it avoided entanglement amid the fallout . According to reports , Goldman Sachs was the
" We identified the risk early and took prompt action consistent with the terms of our contract with [ Archegos ]. I am pleased with how the firm handled it ."
DAVID SOLOMON , CEO , GOLDMAN SACHS
first to offload a huge chunk of its portfolio on 26 March after reaching a deal with Archegos to sell a block of between $ 3 billion and $ 4 billion in stocks . The reports added that over the course of the day , Goldman Sachs sold more than $ 10 billion of shares in stocks linked to Archegos .
“ We have robust risk management that governs the amount of financing we provide for these types of portfolios ,” said David Solomon , CEO of Goldman Sachs , on the bank ’ s first quarter 2021 earnings call . “ We identified the risk early and took prompt action consistent with the terms of our contract with the client . I am pleased with how the firm handled it .”
Goldman ’ s US investment banking rival Morgan Stanley was equally as quick off the mark , reportedly offloading $ 8 billion worth of shares on 26 March .
The institution did not escape entirely unscathed , however , after it confirmed the collapse of Archegos led to a $ 911 million loss , including $ 644 million from the amount the family office owed Morgan Stanley but failed to pay , and $ 267 million in trading losses .
Similar to Morgan Stanley , UBS incurred a relatively small loss in comparison to its Swiss counterpart Credit Suisse of $ 861 million , while MUFG Securities logged trading losses of $ 270 million after it closed all positions with Archegos .
Deutsche Bank was arguably the biggest winner of the collapse of Archegos . As the German institution posted its best quarter since 2014 , it surfaced unharmed from the market event with no major losses . Reports suggested that Deutsche Bank had brokered a $ 4 billion private deal with buyers including hedge fund Marshall Wace on the same day that Goldman Sachs and Morgan Stanley had sold their positions . After years of major litigation troubles
18 // TheTRADE // Summer 2021