The biggest multi-manager hedge funds are directing more capital into separately managed accounts (portfolios run for one client), which reached $255 billion at the end of last year, up 20% from 2024, according to an internal Goldman Sachs report seen by Reuters. The structures allow investors greater control over assets and more leverage in negotiating management and performance fees, while helping managers address scarce investment talent. SMA assets have grown 13% annually over the past decade, compared with 5.5% for the broader hedge fund industry, and now represent 7.4% of industry assets under management. Half of hedge funds operate at least one SMA, with pension and sovereign wealth funds showing growing interest. Global hedge funds are on track for another strong year after first-half performance benefited from the AI boom across most investment strategies.