Key Takeaways
- • Goldman Sachs research finds hiring at multi-strategy and multi-manager hedge funds has slowed, with headcount growing 7% from mid-2025 to mid-2026, versus 10%, 18% and 27% growth in 2025, 2024 and 2023 respectively.
- • Separately managed account (SMA) external allocation programs grew from $34 billion to $47 billion over the past 12 months, per Goldman's report, equivalent to roughly 800 full-time employees.
- • The average SMA ticket size is nearly $190 million, up 19% from the prior year, according to Goldman.
- • Funds including Millennium, Schonfeld and Qube are deploying capital through SMAs, while Citadel has begun to enter the space.
- • Investment roles accounted for 43% of hiring in 2026, up from 40% in 2024, indicating a pullback in non-investment hiring.
Summary
A long-running competition among hedge funds for top portfolio managers and traders has driven compensation sharply higher, with some talented traders receiving guarantees of tens of millions of dollars before making a single trade. New research from Goldman Sachs suggests that pressure may be easing. According to the report, hiring at multi-strategy and multi-manager funds has slowed relative to the assets these firms have attracted over the past year. Headcount at these platforms grew 7% from mid-2025 to mid-2026, down from increases of 10% in 2025, 18% in 2024 and 27% in 2023.
Goldman attributes the slowdown largely to the continued build-out of external allocation programs, which substitute third-party capital deployment for internal hiring. Funds including Millennium, Schonfeld and Qube have been active in allocating capital to outside managers, typically through SMAs, which offer more transparency and flexibility than conventional fund structures. Citadel, which has traditionally not pursued external allocations, has also begun to participate.
The SMA model has also provided a path for experienced portfolio managers to launch their own firms without the months-long fundraising process required from institutions such as pensions and sovereign wealth funds. Many founders of firms receiving SMA capital were previously traders at prominent multi-strategy managers. Goldman estimates the growth in SMAs over the past 12 months is equivalent to roughly 800 full-time employees; had those roles been filled through hiring, year-over-year headcount growth would have exceeded 10%, similar to the prior year.
External assets under management rose from $34 billion to $47 billion over the past 12 months, according to Goldman. The average ticket size is nearly $190 million, up 19% from the prior year. Goldman also noted that 43% of hiring at these firms in 2026 went to investment personnel, compared with 40% in 2024, reflecting a pullback in non-investment roles. Goldman described the development as early, but wrote that "a reversal, even a modest one, is a meaningful development."
Goldman attributes the slowdown largely to the continued build-out of external allocation programs, which substitute third-party capital deployment for internal hiring. Funds including Millennium, Schonfeld and Qube have been active in allocating capital to outside managers, typically through SMAs, which offer more transparency and flexibility than conventional fund structures. Citadel, which has traditionally not pursued external allocations, has also begun to participate.
The SMA model has also provided a path for experienced portfolio managers to launch their own firms without the months-long fundraising process required from institutions such as pensions and sovereign wealth funds. Many founders of firms receiving SMA capital were previously traders at prominent multi-strategy managers. Goldman estimates the growth in SMAs over the past 12 months is equivalent to roughly 800 full-time employees; had those roles been filled through hiring, year-over-year headcount growth would have exceeded 10%, similar to the prior year.
External assets under management rose from $34 billion to $47 billion over the past 12 months, according to Goldman. The average ticket size is nearly $190 million, up 19% from the prior year. Goldman also noted that 43% of hiring at these firms in 2026 went to investment personnel, compared with 40% in 2024, reflecting a pullback in non-investment roles. Goldman described the development as early, but wrote that "a reversal, even a modest one, is a meaningful development."
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