Scion Asset Management
Scion Asset Management, LLC is a fee-only firm headquartered in Saratoga, California. The financial advisor has more than $263 million in assets under management (AUM) on a discretionary basis, with only six clients total. This firm does not manage money for individual clients. To find an advisor that does, consider using SmartAsset’s free financial advisor matching service.
Scion Asset Management Background
Founded by CEO Dr. Michael J. Burry, Scion Asset Management began operations in 2013. The firm’s management also includes Chief Operating Officer and Chief Compliance Officer Zaeed Kalsheker, Chief Financial Officer George Serra and Chief Administrative Officer Jonathan Hallam. It’s important to note, however, that the private investment funds count as members of Scion Asset Mangement’s client base. We look further into the company’s client base below.
Scion Asset Management Client Types and Minimum Account Sizes
Scion Asset Management only provides discretionary investment advice to six clients in total. The company’s Form ADV lists one as an insurance company, or separately managed account, while the other five clients are private investment funds. The private funds include Scion Master G7, L.P. ; Scion G7, L.P. ; Scion G7 Offshore, Ltd. ; Scion Value G7, L.P. and Scion Asia, L.P.
Additionally, all private investment funds are Cayman Islands or Delaware-based. The firm says that investors in the private investment fund may also include high-net-worth individuals, foundations, trusts, charitable organizations, family offices, a fund of hedge funds, corporations and businesses, pension plans and endowments.
The firm does not require a minimum investment amount for a separately managed account, but it does for its private investment funds. For the Scion G7 and Scion G7 Offshore funds, the firm generally requires a $1 million minimum investment. Scion Asset Management also mandates a $1 million minimum for the Scion Asia fund. For the Scion Value G7 fund, however, the firm requires a minimum account size of $500,000. Scion also retains the discretion to make an exception to the minimum investment requirement. The firm requires each investor in a private fund to be qualified as an accredited investor.
Services Offered by Scion Asset Management
Scion Asset Management implements an investing approach that aims to simultaneously diversify their clients’ portfolios and increase clients’ success rate. When it comes to investment products, clients generally have a wide selection of instruments to choose from. The firm’s products and services include:
- Institutional Advisory Services
- Discretionary investment management
- Fundamental Investment Analysis
- Market Judgement
- Risk Management
- Technical Investment Analysis
- Asset Allocation and valuation
- Investment Products
- Exchange-traded funds (ETFs)
- Government securities
- Corporate debt securities
- Convertible securities
- Options and warrants
- Equity swaps and credit default swaps
- Derivative instruments
Scion says it values fundamental research when working to meet clients’ investment objectives. The firm also describes its approach as one that seeks out undervalued securities when conducting investment research. Through this method, the firm analyzes the stock market from a range of approaches, which may include technical and macroeconomic factors. Scion Asset Management also says it works to provide clients with a diverse mix of portfolio opportunities it believes will increase their chances of investment success.
The firm may also use leverage and derivative strategies to increase the rate of client success. The advisory also believes in using fundamental analysis methods to assess market conditions from a holistic standpoint. When it comes to risk, Scion Asset Management says it works to identify, measure and observe any risks that may affect a client’s investments.
Fees Under Scion Asset Management
Though Scion Asset Management doesn’t list a fee schedule on its website or firm brochure, the company charges clients both a management fee and incentive allocation/performance-based fee for investment services. The management fee requires clients to pay up to 2% annually. For separately managed accounts, the firm requires management fees to be calculated and paid in arrears on a quarterly basis. But for private investment funds, the firm says it deducts asset-based fees from the investor’s capital account in advance and on a monthly basis. Scion Asset Management may also adjust the fee for clients or investors through separate agreement, without notifying the other clients or investors in a fund. In addition, the firm may also reduce or waive management fees at its discretion.
For incentive allocation fees, Scion Asset Management will earn up to a 20% share in the appreciation amount of each client’s account. The firm says it bases its incentive allocation fees on each year’s performance. It charges the fees at each December 31.
What to Watch Out For
As noted above, this firm does not manage money for individuals. If you are seeking that type of firm, consider using SmartAsset’s free financial advisor matching service.
Potential clients should note that Scion Asset Management retains the authority to shift their clients’ investment activities without providing notice. The firm explains that it may expand or reduce clients’ investment strategies to strategically meet market conditions. Therefore, it may buy or sell securities without obtaining specific client consent.
Employees within the firm may also use personal trading accounts to purchase the same securities it may recommend for its clients. However, firm professionals may nullify such transactions if they pose a conflict of interest for clients.
Scion Asset Management does not have any disclosures of legal or regulatory action, according to its most recently filed Form ADV.
Opening an Account With Scion Asset Management
You’ll generally have two options if you’re interested in opening an account with Scion Asset Management. If you live near Cupertino, you can stop by the firm’s office to speak with a representative. You can also set up an appointment with a financial advisor by calling the firm at (408) 441-8400.
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All information was accurate as of the writing of this article.