Separately managed account (SMA)

A mandate a manager runs separately for one investor on negotiated terms. In private markets, it can give the investor tailored investment guidelines, reporting, and economics; the manager may still have discretion over individual investments.

Also called SMA, Managed account

Separately managed account (SMA) in practice

Hypothetical: a pension investor negotiates a separate mandate with specified investment limits and reporting requirements. It may agree to a lower fee or a narrower mandate than a pooled fund, but neither is inherent in an SMA. The legal structure and investment discretion depend on the agreement.

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