The Wall Street Journal-20080131-Scion Closes Asian Funds in Shift

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Scion Closes Asian Funds in Shift

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Scion Capital LLC, a $1 billion hedge-fund firm run by Michael Burry, is shutting its Asian funds to focus on opportunities that will be created by a U.S. economic slowdown.

Scion's Asian funds oversaw about $200 million in assets and returned between 80% and 116% since they started in early 2005.

After the funds are closed, money will be returned to investors beginning at the end of the first quarter, Mr. Burry wrote in a recent letter to clients.

The Asian funds aren't being forced to close by client redemptions or other pressures, Mr. Burry said. Investors can put the proceeds from the liquidation of the Asian funds into Scion's main global funds, he added in the letter.

"The primary motivation for this move is that I foresee a significant opportunity to invest in dramatically undervalued distressed assets and out-of-favor businesses over the next several years," Mr. Burry wrote.

Scion was one of the first hedge funds to spot problems in the subprime-mortgage market in 2005.