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Discovery Capital Management Review

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Discovery Capital Management, LLC is a fee-only firm providing investment advisory services for private funds and investors. The financial advisor currently has more than $14.8 billion in assets under management (AUM).

Note that this firm does not work with individual clients. To find an advisor for your personal portfolio, consider using SmartAsset’s free financial advisor matching service.

Discovery Capital Management Background

Founded in April 1999, the firm began its operations in August 1999 as an investment advisor and subsidiary of its parent company, Discovery Capital Management Holding Co., L.P. In collaboration with two affiliated investment advisors, the firm tailors its services to pooled investment funds which are intended for institutional investors.  Robert K. Citrone owns both Discovery Capital Management and its parent company.  

What Types of Clients Does Discovery Capital Management Accept?

Discovery Capital primarily offers investment advisory services to pooled investment funds or private funds. 

Discovery Capital Management Minimum Account Sizes

The firm generally requires a $1 million account minimum for its pooled investment funds, but this fee can also vary based on any specific fund’s documentation. General partners of the funds may also waive the minimum requirement at their discretion.

Services Offered by Discovery Capital Management

Discovery Capital offers a range of investment advisory services, including: 

  • Investment Management 
  • Subadvisory services 
  • Management consulting 
  • Portfolio guidance 

Investment Philosophy

Through its pooled investment funds, Discovery Capital strives to invest across global markets by using analytical strategies such as fundamental analysis, “top-down” global macro analysis, political and policy risk assessment. To identify investment opportunities both on a local and global basis, the firm also employs fundamental research for its industry, company and securities selections. 

Discovery Capital has also adopted policies and procedures to ensure that it allocates investment opportunities for clients on a fair basis. The firm believes this alleviates the potential conflicts of interest that may result from the management of multiple accounts. Additionally, the firm’s strategies consist of finding high risk-adjusted total returns, employing both “equity long-short” and “global macro” strategies and implementing fundamental research to assess potential investments, or investments, in other countries’ markets. The firm also believes in managing portfolio risk by being flexible and capable of quickly adjusting to market conditions. 

Fees Under Discovery Capital Management

Discovery Capital doesn’t provide a fee schedule, but it does offer information about its fee structure. Investors in any of the funds may encounter a management fee which is based on the value of AUM. The firm may also charge such investors a performance-based allocation or fee. If applicable, the investment management fees are paid on a monthly or quarterly basis in arrears. The performance-based fees are allocated annually, or upon realization for private equity vehicles. 

For the funds where the firm directly manages investments, and an affiliate serves as a general partner, the management fees and performance-based fees are taken from the fund’s assets. These can be paid to either Discovery Capital or the general partner. The firm also charges an investment management fee for certain private equity funds. This fee takes into account the aggregate cost basis of all portfolio investments at the close of each calendar quarter in a year. 

Though fees are generally non-negotiable, Discovery Capital retains the discretion to waive or reduce fees for accounts held by firm employees or certain investors. Clients with managed accounts are billed separately.

What to Watch Out For

The firm may use client commissions for research and brokerage products and services. This is important to consider since the firm won’t be paying for such products and services itself. Therefore, firm advisors may be incentivized to choose or recommend broker-dealers based on their interest in obtaining such products and services. 

Also, as noted above, this is not a firm for individual investors. If that is what you are interested in, consider finding one with SmartAsset’s free financial advisor matching service.

The firm also has a notable disclosure, which we’ll look further into below.

Disclosures 

Discovery Capital only has one disclosure related to regulatory action, according to its most recent Form ADV. In 2015, the Brazilian Securities Exchange Commission (Comissao de Valores Mobiliarios (CVM)) accused the firm of violating regulatory requirements related to equity participation. Discovery Capital maintained that it acted in accordance with the applicable regulatory requirements, and that it acted under guidance from the Brazilian Legal Counsel. But the case was settled with a $90,000 fine. 

Opening an Account With Discovery Capital Management

If you’re interested in opening an account with Discovery Capital, you can do so through two ways: you can call to set up an appointment at (203) 838-3188, or you can stop by the firm’s office to speak with a representative. 

Where is Discovery Capital Management Located?

Discovery Capital’s principal office is located in Norwalk, Connecticut at 20 Marshall Street. 

Tips for Saving for Retirement

  • Though there are many ways you can save for retirement, investing can be one of the most effective. Whether you’re new to the stock market, or an investor with a few years of experience, organization and planning can go a long way. If you’d like to see how much your investments may generate over time, consider using our investment calculator
  • Though costlier than personal financial management, hiring a financial advisor could greatly transform your financial situation. Financial advisors can offer a personalized, holistic approach to growing your wealth. But you should first identify your savings goals and which areas of finance you’d like assistance with. SmartAsset’s financial advisor matching tool will pair you with up to three local advisors suitable to your needs. 

All information was accurate as of the writing of this article.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research