Key Takeaways
- • Goldman Sachs research found head count growth at large multi-strategy and multi-manager hedge funds slowed to 7% from mid-2025 to mid-2026, versus 10%, 18%, and 27% growth in 2025, 2024, and 2023 respectively.
- • The slowdown is attributed to the build-out of external allocation programs, primarily separately managed accounts (SMAs), which substitute third-party capital deployment for internal hiring.
- • Goldman estimates SMA growth equals roughly 800 full-time employees; without it, year-over-year headcount growth would have exceeded 10%.
- • External assets under management in these SMA programs rose from $34 billion to $47 billion over the past 12 months, with an average ticket size of nearly $190 million, up 19% year over year.
- • Non-investment hiring has pulled back, with 43% of roles going to investment personnel in 2026, up from 40% in 2024.
Summary
A new Goldman Sachs report, as reported by Business Insider, suggests the intense competition among hedge funds for top portfolio managers and traders may be cooling. Hiring at the largest multi-strategy and multi-manager platforms has slowed relative to the assets they have attracted over the past year. These firms grew headcount 7% between mid-2025 and mid-2026, a marked step down from prior years. Goldman attributes much of the slowdown to the expansion of external allocation programs. In a quote cited in the report, Goldman states that the slowdown "is likely a byproduct of the continued build-out of external allocation programs, which effectively substitutes third-party capital deployment for internal hiring."
Separately managed accounts have become a central feature of this shift. Firms including Millennium, Schonfeld, and Qube have been active in deploying capital to external managers, typically through SMAs, which offer more transparency and flexibility than conventional allocations. Citadel, which has historically avoided external allocations, has also begun to participate. The structure gives experienced portfolio managers a faster route to launching their own firms than traditional fundraising from pensions and sovereign wealth funds, and many founders of SMA-backed firms were previously traders at major multi-strategy managers.
According to Goldman, the growth of SMAs over the past 12 months is equivalent to roughly 800 full-time employees. Had those roles been filled internally, year-over-year headcount growth would have been above 10%, close to the prior year's pace. External AUM in these programs rose from $34 billion to $47 billion, and the average ticket size reached nearly $190 million, up 19%. Goldman also observed a shift in hiring mix, with investment personnel accounting for 43% of roles in 2026, compared with 40% in 2024. Goldman wrote that "a reversal, even a modest one, is a meaningful development," while noting the trend is still early.
Separately managed accounts have become a central feature of this shift. Firms including Millennium, Schonfeld, and Qube have been active in deploying capital to external managers, typically through SMAs, which offer more transparency and flexibility than conventional allocations. Citadel, which has historically avoided external allocations, has also begun to participate. The structure gives experienced portfolio managers a faster route to launching their own firms than traditional fundraising from pensions and sovereign wealth funds, and many founders of SMA-backed firms were previously traders at major multi-strategy managers.
According to Goldman, the growth of SMAs over the past 12 months is equivalent to roughly 800 full-time employees. Had those roles been filled internally, year-over-year headcount growth would have been above 10%, close to the prior year's pace. External AUM in these programs rose from $34 billion to $47 billion, and the average ticket size reached nearly $190 million, up 19%. Goldman also observed a shift in hiring mix, with investment personnel accounting for 43% of roles in 2026, compared with 40% in 2024. Goldman wrote that "a reversal, even a modest one, is a meaningful development," while noting the trend is still early.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.