Managed Accounts: Boom → Booming → Structural
By: Mel Sutton, ALTALLO - Founder
Published: 2026-02-03 · Read time: 6 min · Category: Managed Accounts
Two consecutive years of ~20% growth at $13.7 trillion signals a structural reallocation of institutional capital. What this means for the traditional fund stack and vendor economics.
Managed account assets grew 19.8% to $13.7 trillion in 2024, following 19.6% growth in 2023 (Cerulli). While 2025 figures are not yet published, early indicators suggest a similar growth trajectory.
This is no longer a cyclical rebound or a niche preference shift. Two consecutive years of approximately 20% growth at this scale signals a structural reallocation of institutional capital, driven by demands for cost efficiency, transparency, operational resilience, and scalable oversight.
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At a high level, the rise of managed accounts does not invalidate the traditional fund stack.
What it does invalidate is the long-held growth assumption: that institutional capital growth will primarily express itself through new pooled vehicles.
That assumption is wrong.
Most vendors that service fund vehicles already support managed accounts in some form. It is not really an issue of capability. It is the commercial model and commercial prioritisation. An SMA is not a side hustle for a fund admin.
Historically, vendor growth was driven by launching new pooled funds, growing fund-level AUM, and adding structural complexity that supported higher fees.
Managed accounts change this dynamic. Capital can scale without creating new pooled vehicles. Complexity shifts away from the fund wrapper and toward the allocator. Fees are no longer set by peer comparisons, but by what the allocator could build internally.
While new managed accounts are launched, they are bespoke and do not scale like funds. Capital growth concentrates rather than multiplying entities.
The result is slow but persistent revenue pressure for vendors whose economics still depend on fund count or pooled AUM.
More fundamentally, managed accounts are no longer just a manager decision. They are increasingly driven by allocators, and in some cases by beneficial owners themselves, who often sit above the allocator and ultimately control the structure.
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Senior management should begin with three questions:
How much of our revenue assumes a fund exists? Not "supports funds", but requires them.
Where does our cost base scale linearly with volume? Headcount, bespoke workflows, manual review.
Which services are priced as legacy obligations rather than strategic products? Managed accounts often sit here.
If growth in client capital increasingly arrives via SMAs, any misalignment across these three areas compounds quickly.
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Most vendors today support SMAs, price them defensively, resource them reluctantly, and cross-subsidise them with fund economics.
That model works at low volume. It breaks when managed accounts become the default.
The risk is not losing clients. It is servicing more capital for less revenue per dollar, with no corresponding reduction in cost.
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The required shift is not from "funds to SMAs." It is from entity-centric businesses to strategy-centric businesses.
That means organising services around how strategies operate, not how vehicles are formed. Measuring profitability at the strategy or account level, not just per fund. Designing offerings that scale across many accounts without bespoke effort. Investing only where automation genuinely lowers marginal cost.
This is an operating model decision.
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No single product launch solves this.
What matters is whether leadership continues to allocate talent, capital, and incentives around funds, or deliberately reweights the business toward where client capital is actually flowing.
If the former persists, erosion is inevitable, even with stable clients and strong market conditions.
If the latter happens early, vendors can protect margins, win consolidation, and become structurally embedded in SMA-heavy client models.
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Managed accounts are not dismantling the traditional fund stack. They are changing the unit economics.
Vendors that continue to define success by fund count, fund launches, or pooled AUM will see their businesses slowly compressed.
Vendors that realign around strategy delivery, scalable oversight, and cost discipline will remain relevant, and in many cases stronger, in an SMA-dominant industry.