NASA’s space shuttle Challenger launches from Cape Canaveral, Florida, on January 28, 1986, disturbing nearby flocks of birds. After years of decline, hedge fund launches have surged thanks to separately managed accounts (SMAs). SMAs allow investors more control and access, changing the game for emerging funds. Kristin Kramer of Goldman Sachs highlights the shift towards SMAs funded by larger investors. This structure offers benefits like increased transparency and alignment between managers and investors. SMAs have become popular due to their capital efficiency and simplified marketing processes, making it easier for funds to attract investors. Despite the benefits, some founders may resist the additional transparency and risk metrics required by SMAs. Certain illiquid strategies may not be suitable for the SMA structure, emphasizing the importance of alignment between managers and investors in the evolving hedge fund industry.

Read more at Yahoo Finance: A top Goldman prime broker lays out why it’s getting easier to launch a hedge fund