Single-client accounts, known as Separately Managed Accounts (SMAs), are capturing a growing share of global hedge fund capital as allocators seek tighter control, customized fee structures, and direct access to scarce trading talent, according to an internal Goldman Sachs report.
Key Figures & Industry Insights:
- Accelerated Growth: SMA hedge fund assets expanded 20% YoY to reach $255 billion by year-end, growing at a 13% CAGR over the last decade—more than double the 5.5% annual growth rate of the broader hedge fund industry.
- Industry Market Share: SMAs now account for 7.4% of total hedge fund AUM, with half of all global hedge funds operating at least one SMA account.
- Large Fund Dominance: Adoption was strongest among mega-managers (>$5B AUM), where 6% more firms introduced SMAs due to scalable infrastructure and deeper operational resources.
- Institutional Demand: Pension funds and sovereign wealth funds are leading adoption to better customize risk management, fee terms, and asset controls.
- Performance Edge: Portfolios utilizing SMAs delivered approximately 0.4% higher net returns compared to traditional commingled fund investors.
Driven by fierce competition for top portfolio managers, the shift from commingled pools to bespoke single-client mandates is redefining institutional hedge fund allocation! 📊💰