Michael Burry Closes Hedge Fund, Hints at New Venture
Michael Burry, the investor known for his role in “The Big Short,” has closed his hedge fund, Scion Asset Management. This decision marks his exit from managing external capital, as indicated by his recent SEC deregistration. The announcement was made on Monday, following a recent update on Scion’s portfolio.
Details of the Hedge Fund Closure
- Hedge Fund Name: Scion Asset Management
- Managed Amount: Approximately $155 million
- Accounts: Four accounts as of late March
- SEC Termination: Took effect on October 30, 2023
Burry shared a screenshot on social media confirming Scion’s closure. His final post prior to the announcement hinted at this change. He remarked on recent speculative behaviors in the market. Specifically, Burry compared current trends in artificial intelligence to the dot-com bubble, raising concerns about inflated stock values.
Burry’s Investment Strategy and Market Views
In his recent portfolio update, Burry revealed he held bearish put options on prominent AI firms, Nvidia and Palantir. His position sparked a public exchange with Palantir’s CEO, Alex Karp, who criticized Burry’s strategies. Burry later clarified a misconception regarding his investment amounts, stating that he purchased 50,000 put options at a $1.84 premium each, totaling $9.2 million.
Historical Context and Implications
This closure mirrors Burry’s actions in 2008 when he shut his previous fund, Scion Capital, amid pressure from clients. He later re-established his investment firm in 2013, maintaining a limited number of external clients. The trend of closing hedge funds to external investors is not uncommon among notable investors aiming to avoid client-related pressures.
Prominent figures like John Paulson and David Tepper have also transitioned their hedge funds into family offices. This strategic shift allows them greater freedom to invest without the responsibilities tied to external clients.
Future Prospects for Burry
Despite relinquishing management of external funds, Burry’s influence on the market remains substantial. His social media presence suggests he will continue to share his insights and investment strategies. As noted in his bio on X, new developments are anticipated, indicating that Burry’s journey in the financial landscape is far from over.
In conclusion, while Burry may have closed Scion Asset Management, his next ventures appear promising. Investors and analysts alike will be watching his moves closely as he embarks on this new chapter.
