Separately managed accounts (SMAs) are no longer a niche structure—they’re increasingly becoming a core part of how allocators access strategies and how managers raise capital.
In our "Separate Ways II – Beyond the Numbers" webinar hosted by Hedgeweek®, a panel of industry experts explored what’s driving this continuing shift and what it means for both sides of the market. The takeaway is clear: while the core benefits of SMAs haven’t changed, the scale, accessibility and pace of adoption have.
Transparency, control and customization are central
For allocators, the appeal continues to center on three key priorities—transparency, control and customization.
SMAs provide greater visibility into underlying holdings, more direct oversight of risk and the ability to tailor exposures to specific investment objectives. Rather than relying on the framework of a commingled vehicle, investors can define mandates that align more closely with their liquidity needs, governance requirements and portfolio construction goals.
A broader set of allocators is entering the market
What was once dominated by the largest institutional investors is now attracting a wider range of participants.
In addition to pension funds and traditional asset allocators, sovereign institutions, endowments, foundations and family offices are increasingly exploring or scaling SMA programs. Capital efficiency is also playing a growing role, with allocators looking for ways to optimize how capital is deployed while maintaining targeted exposure.
As operational models improve and barriers to entry come down, more firms are finding SMAs both viable and strategically valuable.
A growing opportunity for managers
SMAs can offer a more efficient route to market, particularly for emerging managers or firms launching new strategies. Compared with traditional fund structures, SMAs can reduce the cost and complexity of bringing a strategy to market while providing allocators with the transparency and control they are seeking.
In many cases, that combination can help managers differentiate themselves and accelerate capital formation.
Scaling SMAs introduces new operational demands
The benefits of customization come with trade-offs. Managing multiple accounts, meeting varying reporting requirements and handling increased data volumes can place pressure on both managers and allocators. As adoption grows, having the right infrastructure becomes critical.
This is driving greater reliance on fund administrators, platform providers and technology partners to help standardize workflows and manage complexity at scale.
Technology is becoming a key enabler
Innovation is beginning to reshape how SMA programs are managed.
AI is emerging as a tool to support operational efficiency—from data ingestion to reconciliation and exception management. While human oversight remains essential, the ability to streamline these processes is expected to reduce operational burden and support continued growth.
What comes next
The direction of travel is clear: SMAs are becoming more accessible, more scalable and more central to investment strategies across the industry. But as adoption accelerates, success will depend on getting the fundamentals right.
Watch the "Separate Ways II – Beyond the Numbers" webinar to explore the full findings, hear expert perspectives and understand what’s next for separately managed accounts.