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Updated on Monday, June 21, 2021
Scion Asset Management is a small firm focused on serving institutional investors, and pooled investment vehicles in particular. The firm doesn’t work with individual investors, although individuals may invest in the funds for which it provides investment advisory services. Based in Saratoga, Calif., Scion has just six employees, two of whom serve in investment advisory roles. The team currently oversees over $638.9 million in assets under management (AUM).
|Assets under management: $638,901,404|
|Minimum investment: Varies by fund|
|Fee structure: A percentage of AUM, performance-based fees|
|Headquarters: 20665 4th Street, Suite 201, Saratoga, CA 95070|
All information included in this profile is accurate as of June 9, 2021. For more information, please consult Scion Asset Management’s website.
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Overview of Scion Asset Management
Scion Asset Management was founded in 2013 by Michael J. Burry. The company is owned and controlled by Burry, who is a physician turned investor. He was the manager of Scion Capital prior to the stock market crash of 2008, and was brought into mainstream recognition due to his mention in Michael Lewis’ book “The Big Short.” Written about the crash of the subprime real estate market, the book was eventually made into an Oscar-winning Hollywood movie. Burry was one of the few to foresee the risks of the subprime market.
Today, Burry leads Scion Asset Management’s investment approach, with the help of a small team of investment professionals who assist in implementing the firm’s strategies.
Scion Asset Management’s pros
- Well-known investment manager: Burry, the firm’s founder and the leader of its investment approaches, is a well-known investor whose insight has resulted in big gains in the past.
- Institutional investing opportunities: For those looking for institutional investing opportunities, the funds that Scion Asset Management oversees can provide access.
Scion Asset Management’s cons
- High minimums for individuals to invest in funds: Investing as an individual in one of the funds that Scion Asset Management oversees requires a minimum investment of at least $500,000, with some funds requiring a higher minimum. Additionally, individuals must hold the status of accredited investor.
- Limited offerings: Scion Asset Management isn’t an advisory firm as much as it is an asset management company. You won’t receive financial advice or any financial planning services as an individual investor, and you can only invest in the available funds that the firm oversees.
- Strategies aren’t specified: There isn’t a lot of specificity provided regarding the investment strategies Scion uses to manage its five client funds, and the firm maintains a lot of control over what investment types are used and which strategies are involved.
What types of clients does Scion Asset Management serve?
Scion Asset Management exclusively serves institutional investors. All of its clients are currently pooled investment vehicles, of which it serves the following five funds:
- Scion Master G7, L.P. (the Master Fund): A Cayman Islands exempted limited partnership
- Scion G7, L.P. (the Onshore Fund): A Delaware limited partnership
- Scion G7 Offshore, Ltd. (the Offshore Fund): A Cayman Islands exempted company
- Scion Value G7, L.P. (the Value Fund): A Delaware limited partnership
- Scion Asia, LP, (the Asia Fund): A Delaware limited partnership
In order to invest with Scion Asset Management as an individual, one needs to have enough to buy into a fund. The fund with the lowest minimum is the Value Fund, which generally requires an investment of at least $500,000. In addition, anyone buying into the fund is required to be an accredited investor, which means they must meet requirements that include having either an income of $200,000 annually ($300,000 if married) or a net worth over $1 million.
Investors in the firm’s funds include not only high net worth individuals, but also family offices, fund of hedge funds, endowments, foundations, trusts, charitable organizations, pension plans and other corporate or business entities.
Services offered by Scion Asset Management
In short, Scion Asset Management manages private funds — specifically, it provides investment advice to five private investment funds. Its aim in managing the funds is to provide its clients with long-term capital appreciation.
Scion Asset Management’s investment strategy
In general, Scion Asset Management relies on fundamental research to guide its investment decisions. To do so, the firm examines investment opportunities around the world in an attempt to identify assets that are undervalued.
Scion Asset Management primarily invests in equities, though it will use other investment types, including debt, exchange-traded funds (ETFs), government securities, options, warrants, equity swaps, credit default swaps and other types of derivatives. That being said, each of the funds it oversees has its own focus area. For example, Scion’s Asia Fund focuses on assets traded in Japan, South Korea and Hong Kong.
Portfolios are constructed according to Scion’s assessment of which opportunities are appropriate and which assets will add the diversity needed to help the funds achieve the desired capital appreciation. Scion also uses a number of different strategies to leverage its positions, including using shorts and investing in derivatives.
Fees Scion Asset Management firm charges for its services
The institutional investors that Scion Asset Management works with pay for the firm’s services based on a percentage of assets under management, as well as a performance-based fee. The asset-based management fee can be as high as 2% a year. Scion Asset Management can also take up to 20% of the value of the appreciation from each client’s account.
In addition to the aforementioned fees, the firm’s clients are also responsible for all operating costs involved in running the fund, plus their portion of the expenses shared among Scion Asset Management’s clients.
Scion Asset Management disciplinary disclosures
Scion Asset Management does not have any disciplinary disclosures to report. For reference, the Securities and Exchange Commission (SEC) requires all registered investment advisors to disclose any past disciplinary events involving the firm, its employees or its affiliates in their Form ADV filings. This includes any civil, regulatory or criminal actions within the last 10 years.
For further information on Scion Asset Management, visit the firm’s IAPD page.
Who is Scion Asset Management right for?
For the most part, Scion Asset Management is going to work best for institutional investors looking to take advantage of capital appreciation for their endowments or other investments. The lowest minimum to buy into one of the funds that Scion manages as an individual is $500,000. Plus, all individuals must be accredited investors. As a result, many individual investors, particularly beginners, won’t be able to access Scion Asset Management.
For those looking for a more traditional financial advisor, there are a number of options out there to consider to ensure you find an advisor who best suits your needs.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.