Skip to content
Thursday, October 29, 2026 · Today’s edition, 6:30 a.m. ETThu, Oct 29 · 6:30 a.m. editionSign inMy Desk 0EditionsSign in

Multistrategy headcount growth slows to 7% as SMAs reach $47 billion

Goldman research cited by Business Insider puts the average external allocation at nearly $190 million, up 19% year on year.

$190MAverage external allocation size, up 19% year on year

At a glance

  1. Goldman tied part of the slowdown to external allocation programmes, which let a platform deploy capital with independent managers instead of recruiting in-house teams.
  2. An average external allocation of nearly $190 million is now a capacity number for fund selectors: a single SMA mandate can move a strategy's asset base.
  3. The research names Millennium, Schonfeld and Qube as firms that have expanded their use of SMAs, and says Citadel has begun exploring external allocations.

Headcount at multistrategy and multi-manager hedge funds increased 7% between mid-2025 and mid-2026, down from 10% growth in the prior year, according to Goldman Sachs research reported by Business Insider and covered by Hedgeweek on Oct. 23. That continues a slide from 18% in 2024 and 27% in 2023.

Goldman tied part of the slowdown to external allocation programmes, which let a platform deploy capital with independent managers instead of recruiting in-house teams. External assets under management at multistrategy firms rose from $34 billion to $47 billion over the past 12 months, a $13 billion increase Goldman says is equivalent to roughly 800 full-time employees. Counting that capacity, effective annual headcount growth would have been above 10%, broadly in line with the previous year.

An average external allocation of nearly $190 million is now a capacity number for fund selectors: a single SMA mandate can move a strategy's asset base. The average rose 19% year on year, which tells a selector what large platforms are already asking managers to absorb and how much transparency and control those platforms get in return for the mandate.

The research names Millennium, Schonfeld and Qube as firms that have expanded their use of SMAs, and says Citadel has begun exploring external allocations. The structures let portfolio managers launch independent firms with institutional capital.

Recruitment priorities have moved with it. Investment professionals accounted for 43% of hiring in 2026, up from 40% in 2024, as firms reduced recruitment for non-investment roles. The shift follows several years of competition for portfolio managers in which multistrategy firms offered guaranteed packages worth tens of millions of dollars. Hedgeweek reports that the findings suggest external programmes are beginning to ease hiring pressure across the sector, while competition for established portfolio managers remains significant. The open question for selectors is whether the SMA route keeps pulling talent out of platform payrolls, and what that does to the fee and capacity terms offered to outside managers.

Reported by the Hedge Funds & Liquid Alts desk from Hedgeweek and Business Insider (via Hedgeweek). Published . Corrections

Related

Alternatives

Citadel, Bridgewater, Man Group expand AI use and flag reliance risk

Some Citadel investment teams have built AI versions of themselves that conduct independent research, and Bridgewater's AIA Labs is extending AI research across the firm.

Alternatives

ExodusPoint loses two Dubai macro PMs within a year of joining

Chris Wheeler and Daniel Dangoor ran independent macro teams at the $15.5 billion firm; the report did not specify their strategies or team capital.

Alternatives

Hedge fund short leverage hits 99th percentile of range

Goldman's AI stock basket fell to the 38th percentile of its one-year range as tech posted record two-week net selling.

Alternatives

BlackRock recommends 50/30/20 split with 20% in alternatives

Its second-half hedge fund outlook says market-neutral strategies now provide more portfolio ballast than bonds.

Alternatives

Millennium reportedly hires Balyasny delta one trader for London pod

UK Financial Conduct Authority records show Max Witcher's Balyasny registration ended in July, while the Millennium appointment has not been confirmed.

Alternatives Weeklyfrom Private Wealth Daily

Manager research and fund selection for wealth allocators.

Free. Every morning. Unsubscribe from any edition in one click.

From other sections