Teng Yue, Fund Run by Ex-Hwang Analyst, Denies Liquidation

(Bloomberg) -- A hedge fund run by a former analyst for Bill Hwang, the investor at the center of massive forced stock sales, told clients that banks haven’t liquidated his assets.

Teng Yue Partners founder Tao Li also said in a brief note over the weekend that he has ample liquidity and sees a lot of buying opportunities, according to a fund investor.

Banks including Goldman Sachs Group Inc. and Morgan Stanley liquidated holdings in Hwang’s family office Archegos Capital Management on Friday after he failed to meet margin calls.

Li’s fund had been the subject of speculation that it, too, had been liquidated because he often makes bets on the same companies as his former boss. The block sales by the banks included several Chinese companies: Tencent Music Entertainment Group; Baidu Inc.; GSX Techedu Inc.; iQiyi Inc.; and Vipshop Holdings Ltd.

Li worked at Hwang’s Tiger Asia Management for seven years before leaving in 2011 to start New York-based Teng Yue.

The firm, which primarily trades Chinese companies, lost about 15% in March as of Friday, according to the investor. It’s still up for 2021, having gained about 40% during the first two months of the year. It returned 70% last year.

Li didn’t return phone and email messages seeking comment.

Like Hwang’s family office, Teng Yue has never filed a 13F form -- which reveals some portfolio holdings -- with the Securities and Exchange Commission. That suggests that Li trades few, if any, U.S. listed shares or that, like Hwang, he may have been using swaps to take positions.

Teng Yue managed $10 billion, including leverage, at the end of 2020, regulatory filings show. The firm’s gross exposure, including borrowed money, typically ranges from 150% to 250% of net assets, according to the filing.

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