Hedge Fund SMAs Reach $255 Billion as Single-Client Accounts Outpace Industry Growth

Separately managed accounts (SMAs) at hedge funds totaled $255 billion at the end of 2025, up 20% year-over-year, according to an internal Goldman Sachs report compiled by its prime insights and analytics unit and seen by Reuters. The growth rate far exceeds the broader hedge fund industry. Goldman estimates SMA-managed assets have grown 13% annually over the past decade, compared to 5.5% for the wider industry. SMAs now represent 7.4% of total industry assets under management, with half of all hedge funds operating at least one such account. The report attributed the surge to a scarcity of investment talent, prompting multi-manager funds to allocate capital to independent third-party hedge funds via SMAs, and to growing demand from pension and sovereign wealth funds seeking greater control over assets and fee negotiations. Managers overseeing more than $5 billion saw the largest expansion, with 6% more running an SMA versus 2024. Portfolios utilizing SMAs outperformed commingled investors by approximately 0.4%.