Can someone explain this portion of this article about Bill Hwang to me? What kind of team at Morgan Stanley and Goldman would have made this decision? Risk? Trading? Portfolio managers? Structurally, in terms of how these companies are set up, how is a decision like this made and executed?
this is a “trading” decision, in that it’s the markets division but things of this size usually are made at the level of the div heads and additionally require legal/compliance to sign off. also operations like this require most of the division for it to work well. even though prime services “own” the position, it involves sales to distribute and trading to manage any risk, so a single team/md can’t really decide to do this without div leadership giving them the green light
Prime brokerage
They had exposure to TRS so probably spg within equities
At GS this was part of Prime Brokerage Desk and the MD / Partner of the desk + the client lead (usually an MD) would be the one making the calls