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A. Firm Description and Principal Owner
Founded in 2010, LexION Capital Management, LP (“LCM”) is an investment adviser with its principal
place of business in New York, NY. LCM also manages the LexION Alpha Fund, LP (“LAF”), a
discretionary pooled investment vehicle, that opened in 2017.
LCM is dedicated to the mission of providing the firm’s clients independent, fee-only financial advice.
The firm’s services include investment management services, employee benefit plan services, and
financial planning services. These services are tailored to meet the needs of the clients.
LAF, the pooled vehicle of LCM, specializes in quantitative investment analysis, which relies on
proprietary models, utilizing a set of valuation, momentum, and other factors, to generate positions and
apply them in a disciplined and systematic process.
Neither LCM nor LAF provide legal or accounting advice. Clients should seek counsel of a qualified
accountant and/or attorney when necessary.
LCM has provided advisory services since 2010.
B. Description of Advisory Services
LCM manages investment portfolios for individuals, qualified retirement plans, trusts, charitable
organizations, corporations, and small businesses.
Investment Management Services
Investment Supervisory Services include, but are not limited to, the following:
• Investment strategy
• Personal investment policy
• Asset allocation
• Asset selection
• Risk tolerance
• Regular portfolio monitoring
LCM offers ongoing portfolio management services based on the individual goals, objectives, time
horizon, and risk tolerance of each client. LCM creates an Investment Policy Statement for each client,
which outlines the client’s current situation (income, tax levels, and risk tolerance levels) and then
constructs a plan to aid in the selection of a portfolio that matches each client’s specific situation.
In order to provide informed recommendations, LCM works with the firm’s clients to determine their
unique financial circumstances and investment objectives. Based on this assessment, LCM will design a
written Investment Policy Statement (“IPS”). The IPS details the overall investment mix, often referred
to as the asset allocation, which is designed to address the client’s needs. In order to identify the
appropriate asset allocation, LCM employs specialized software, as well as proprietary and third-party
research and analysis to evaluate alternative portfolio designs. In addition, LCM reviews the client’s
existing investments compared to the client’s IPS.
LCM evaluates the current investments of each client with respect to their risk tolerance levels and time
horizon. LCM will request discretionary authority from clients in order to select securities and execute
transactions without permission from the client prior to each transaction. Risk tolerance levels are
documented in the IPS, which is given to each client.
LCM works with new clients to develop a plan to transition from the client’s current portfolio holdings
to the allocation and holdings proposed by LCM. On an on-going basis, LCM monitors the client’s
portfolio holdings and the overall asset allocation strategy and conducts review meetings with the client
regarding the account positioning and progress as necessary or requested. LCM typically creates a
portfolio of no-load mutual funds, exchange traded finds (ETFs), and individual securities. LCM may
use model portfolios if the allocation of the model matches the allocation agreed to in the client’s IPS.
LCM will allocate the client’s assets among various investments to diversify the client’s portfolio in a
manner consistent with their IPS. LCM primarily recommends actively and passively managed mutual
funds and ETFs.
For certain investment management clients, LCM will purchase individual bonds as all or part of the
client’s fixed income allocation. In addition, client portfolios may include individual equity securities in
situations in which the disposition of these securities would present an overriding tax burden for the
client or the client specifically requests they be retained. These situations will be specifically identified
in writing by the client.
In addition to managing client’s investment portfolio, LCM may consult with investment management
clients and their legal and accounting advisors on various matters including income and estate tax
planning, business sale structures,
college financial planning, retirement planning, insurance analysis,
personal cash flow analysis, establishment and design of retirement plans, and trust designs, among other
things.
LCM also offers a more limited subset of investment management services called “LexION Access”
where LCM will provide the investment management services described above but with more limited
services, including but not limited to more limited reviews and reporting (principally all web-based),
access to LCM investment professionals via telephone, and more limited advisory consulting access.
Employee Benefit Plan Services
LCM also provides advisory services to participant-directed employee retirement benefit plans. LCM
will analyze the plan’s current investment platform, and assist the plan in creating an IPS defining the
types of investments to be offered and the restrictions that may be imposed. LCM will recommend
investment options to achieve the plan’s objectives, provide participant education meetings, and monitor
the performance of the plan’s investment vehicles.
LCM will recommend changes in the plan’s investment vehicles as may be appropriate from time to
time. LCM generally will review the plan’s investment vehicles and investment policy as necessary.
Financial Planning Services
Separate from its investment management services, LCM also provides advice in the form of financial
planning. The advice is designed to integrate advice regarding the client’s financial, professional, and
personal lives. As part of this service, various types of reports and analysis may be provided to the client.
The types of reports provided to clients will vary depending upon the services requested by the client.
In general, the analysis or report will address one or more of the following areas of concern:
• Personal: Family records, budgeting, personal liability, estate information, and financial goals.
• Education: Educations IRAs, financial aid, state savings plans, grants, and general assistance in
preparing to meet dependent’s continuing educational needs through development of an
education plan.
• Tax & Cash Flow: Income tax and spending analysis and planning for past, current, and future
years. LCM may illustrate the impact of various investments on a client’s current income tax and
future tax liability.
• Death & Disability: Cash needs at death, income needs of surviving dependents, estate
planning, and disability income analysis.
• Retirement: Analysis of current strategies and investment plans to help the client achieve his or
her retirement goals.
• Investments: Analysis of investment alternatives and their effect on a client’s portfolio.
LCM gathers the client’s information through in-depth discussions and interactions. Information
gathered includes a client’s current financial status, future goals, and attitudes towards risk. Related
documents supplied by the client are carefully reviewed and various types of written reports may be
prepared by LCM. Should a client choose to implement the recommendations in the report(s), LCM
suggests the client work closely with his/her attorney, accountant, and/or insurance agent.
Implementation of financial plan recommendations is entirely at the client’s discretion.
LAF, a pooled investment vehicle of LCM, specializes in quantitative investment analysis, which relies
on proprietary algorithms, utilizing a set of valuation, momentum, and other factors, to generate views
on positions and apply them in a disciplined and systematic process. LCM offers its LAF fund to a
qualifying subset of investors:
• High-Net-Worth Individuals
• Pension and Profit Sharing Plans
• University Endowments
• Foundations
• Family Offices
C. Tailored Services and Client Constraints
LCM provides individual advice to each client based upon their specific circumstances including
investment objectives, financial goals, risk tolerance, and other relevant factors.
A client may impose reasonable restrictions on LCM’s discretionary management authority. The
reasonableness of a particular restriction will be assessed on a case-by-case basis by LCM.
D. Wrap Fee Program
LCM does not participate in wrap fee programs, as they typically charge higher-than necessary
ambiguous fees.
E. Assets Under Management
As of December 31, 2023, LCM managed $78,283,210 on a discretionary basis based on custodial
records.