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Tiger Cub Bill Hwang’s Struggles

For Bill Hwang, formerly Julian Robertson’s Korea and Asia Expert at Tiger Management, recent times have been tough.

Bill Hwang’s Tiger Asia continues to struggle. The one-time high-flying Tiger Cub/Seed is roughly flat so far this year. More significantly, assets under management continue to fall, dropping by another 5 percent to $1.9 billion from about $2 billion at year-end and from $3 billion as recently as late last year.

Hwang, the son of a Korean preacher who moved his family from Korea to Las Vegas when Hwang was a child, launched Tiger Asia in January 2001 with some of Julian Robertson’s and his own money after serving as Robertson’s Korea and Asia expert for several years at Tiger Management.

For years, Hwang and Tiger Global’s Chase Coleman had symbolized the success of Robertson’s 10-year strategy to bankroll mostly young, unproven but smart and driven hedge fund managers. And although Coleman hit a rough patch for a couple of years, he has recovered his old touch.

Bill Hwang is not the only Tiger Cub to struggle. Read about the rest of the tribe.

At his height in 2007, Hwang had more than $8 billion in assets under management after generating a 40.4 percent annualized return. However, since then he has tumbled in a downward spiral.

He was down 23 percent in 2008 after being in the black as late as August of that tumultuous year. In 2009 he was up just 3 percent when the global markets sharply rebounded and just 0.5 percent last year after being up more than 6 percent at the end of the second quarter.

Hwang has also run afoul of Hong Kong securities regulators. His firm has been accused of engaging in insider trading of Bank of China Ltd and was separately accused of insider dealing and market manipulation involving China Construction Bank.

These probes triggered a subpoena from the US Securities and Exchange Commission and an investigation by the US Attorney’s office, according to reports.

Until his regulatory problems are resolved, Hwang will most likely have trouble rebuilding his assets.

At least one investor feels that when a cloud hangs over some for a long time with no fire--it usually means there is no fire. The investor sees Hwang as a highly capable person, who with smaller asset base could have one big comeback performance.

However, in this post-Madoff, post-Rajaratnam age, with the SEC clearly ramping up its scrutiny of hedge funds in general, it is hard to imagine many investors — especially public pension funds and endowments — risking their own reputations, let alone their capital, trusting their money with Hwang until the smoke totally clears.

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