Separately managed accounts reach $255bn in 2025

Goldman Sachs’ Prime Insights and Analytics team reported that separately managed accounts held $255 billion at the end of 2025, a 20% increase from a year earlier. The report says SMAs now account for 7.4% of total hedge fund assets and roughly half of hedge funds operate at least one SMA.

A separately managed account places an investor’s capital in a dedicated account managed to a specific mandate rather than pooled in a commingled fund. Investors in SMAs typically receive greater visibility into holdings, more control over risk and trading, and can negotiate management and performance fees directly with the manager.

Goldman’s analysis shows assets in SMAs grew at an annualised rate of about 13% over the past decade, compared with roughly 5.5% annual growth for the broader hedge fund industry. The $255 billion total reflects increased use of single-client structures through 2025.

Large multi-manager platforms and institutional allocators, including pension funds and sovereign wealth funds, are prominent users of SMAs. Platforms use dedicated accounts to allocate capital to specialist investment teams or external managers without placing money into a pooled vehicle.

The report links part of the rise in SMA use to a shortage of investment talent available for direct hire. Multi-manager firms have set up SMA relationships with independent third-party managers to access specialised skills while preserving operational oversight.

Adoption was strongest among the largest hedge funds. The share of managers with more than $5 billion in assets operating at least one SMA rose by 6% between 2024 and 2025, and those firms recorded the largest increases in the number of SMAs they manage. Goldman attributes this in part to larger firms’ greater operational resources and technology, which make it easier to support dedicated mandates.

Goldman’s report also identified an observed performance gap: investors in SMAs appeared to earn about 0.4 percentage points higher returns than comparable commingled investors. The firm notes this is an observed difference and does not establish that the SMA structure itself causes higher returns.

SMAs have grown steadily since gaining traction after the global financial crisis, drawing interest from institutional allocators seeking control and flexibility in how they deploy capital to external managers.