Spotlight: Top hedge funds shut doors as investor access tightens

More than a third of flagship funds run by the world’s 100 largest hedge fund managers are closed to new investment as strong demand for leading strategies makes access increasingly difficult.

Goldman Sachs found 34% of flagship funds are closed to new capital, representing 48% of the assets managed across the flagship strategies of the largest 100 firms. Capacity constraints are particularly pronounced across quant, macro and multi-strategy managers.

Fees rise as capacity tightens

Investors able to secure capacity are also facing higher fees and increasingly restrictive liquidity terms.

Average hedge fund management fees have risen from 1.46% in 2019 to 1.64% in 2025, while performance fees increased from 16.4% to 17.8%, according to Goldman Sachs.

Investor-level gates have also become more restrictive. The average time required for an allocator to fully redeem an investment has increased to 27 months, compared with seven months previously.

Investors look beyond largest managers

Goldman said constrained capacity does not necessarily indicate superior performance. Top-quartile boutique managers with less than $5bn in assets have generated returns broadly comparable with their larger peers.

The bank said allocators could respond by widening searches across established and emerging managers and considering different structures, including commingled funds, separately managed accounts and co-investments.

SMA adoption is already increasing as investors seek greater transparency, capital efficiency and portfolio control, although Goldman warned the structures require greater operational resources.

SMAs now account for an estimated 7.4% of global hedge fund assets, up from 3.4% in 2010. Of the $255bn total, $171bn, or 67%, is implemented through dedicated managed account platforms, with the remainder divided between self-managed allocator programmes and multi-manager hedge funds allocating to external managers.

The findings closely coincide with separate research by Alternative Fund Insight, produced in partnership with SS&C, which surveyed 100 hedge fund managers and found widespread expectations for further SMA growth.