Key Takeaways
- • Separately managed hedge fund accounts (SMAs) reached $255 billion in assets under management in 2025, more than doubling from $107 billion at the start of 2020, representing 138% growth over five years according to GS Prime data.
- • Annual growth rate in SMAs has outpaced wider hedge fund industry growth, with 76% of hedge funds surveyed by AFI expecting moderate to significant growth in the segment over the next three to five years.
- • Investor demand for SMAs is being driven by preferences for greater transparency, control, capital efficiency, and improved portfolio management across complex alternative strategies, with managed accounts increasingly viewed as investment infrastructure rather than governance tools alone.
- • 58% of surveyed hedge fund respondents now manage between one and 10 SMAs, demonstrating that managed accounts have become an integral component of industry operations and asset deployment strategy.
Summary
Separately managed hedge fund accounts have experienced substantial growth over the past five years, with industry assets reaching $255 billion in 2025, according to research conducted by Alternative Fund Insight (AFI) in partnership with SS&C and GS Prime data. This represents more than a 240% increase from $107 billion at the beginning of 2020, indicating accelerating adoption of the SMA structure across the hedge fund sector. Notably, the annual growth trajectory in SMAs has consistently outpaced broader hedge fund industry expansion, positioning managed accounts as a high-growth segment within alternatives.
Industry sentiment supports continued expansion through the remainder of the decade. AFI's survey of 100 hedge funds revealed that 76% of respondents anticipate either moderate (66%) or significant (10%) growth in SMAs over the next three to five years, reflecting confidence in sustained structural demand. This outlook is underpinned by evolving investor preferences that have shifted SMA positioning from purely governance mechanisms to comprehensive investment infrastructure solutions.
The primary drivers of SMA adoption center on enhanced investor control, transparency, and operational efficiency, particularly for complex alternative strategies. According to Paul Kiesling and Rob Swan, co-heads of Lighthouse Platform Services, "Managed accounts are increasingly viewed not just as governance tools, but as investment infrastructure that can improve portfolio management, financing, and risk oversight." This reframing has attracted both institutional investors and family offices seeking greater capital efficiency alongside risk management capabilities.
Operational integration of SMAs within hedge fund businesses has deepened significantly. The survey indicates that 58% of hedge fund respondents currently manage between one and 10 separately managed accounts, underscoring how managed accounts have transitioned from peripheral offerings to core operational components. This expanded adoption suggests that hedge fund managers view SMAs as essential infrastructure for servicing institutional capital and optimizing asset deployment across multiple client relationships.
Industry sentiment supports continued expansion through the remainder of the decade. AFI's survey of 100 hedge funds revealed that 76% of respondents anticipate either moderate (66%) or significant (10%) growth in SMAs over the next three to five years, reflecting confidence in sustained structural demand. This outlook is underpinned by evolving investor preferences that have shifted SMA positioning from purely governance mechanisms to comprehensive investment infrastructure solutions.
The primary drivers of SMA adoption center on enhanced investor control, transparency, and operational efficiency, particularly for complex alternative strategies. According to Paul Kiesling and Rob Swan, co-heads of Lighthouse Platform Services, "Managed accounts are increasingly viewed not just as governance tools, but as investment infrastructure that can improve portfolio management, financing, and risk oversight." This reframing has attracted both institutional investors and family offices seeking greater capital efficiency alongside risk management capabilities.
Operational integration of SMAs within hedge fund businesses has deepened significantly. The survey indicates that 58% of hedge fund respondents currently manage between one and 10 separately managed accounts, underscoring how managed accounts have transitioned from peripheral offerings to core operational components. This expanded adoption suggests that hedge fund managers view SMAs as essential infrastructure for servicing institutional capital and optimizing asset deployment across multiple client relationships.
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