A new wave of leaner, faster hedge-fund launches is on the rise.
Driven by an influx of capital from the separately managed account boom — and by technology that used to be available only to the biggest investment firms — entrepreneurial portfolio managers are launching with just a couple of employees, or in some cases all by themselves, and outsourcing the rest.
Service providers are scrambling to grab their piece of the growing SMA pie, advising managers and supplying the tech and operational plumbing that many PMs are navigating for the first time.
One such example is IIP Services, which launched in 2024 to focus on the expanding market of SMA allocators and managers.
The pitch to managers, according to partner Semi Gogliormella, is straightforward: They can outsource much of the non-investment business — operations, compliance, vendor management, and institutional-grade systems — and focus their early days on investing and raising capital.
Some of IIP’s manager clients have launched with hundreds of millions in capital and little to no staff outside the founders.
Gogliormella, who has held senior operations and compliance roles at firms including WorldQuant and Boulder Hill, said a combination of SMA demand and improved technology has significantly shortened launch timelines. In some cases, he said, managers can be up and running with new SMA capital within weeks of signing an investment management agreement, though he cautioned that this is not the norm.
“Onboarding and going live gets truncated significantly,” Gogliormella said.
The plug-and-play back office
Demand for the tools that make lean launches possible is rising alongside the SMA boom. SS&C, a major software and services provider to hedge funds, told Business Insider the number of clients using its cloud-based investment platform for emerging managers — Eze Eclipse — has risen more than 25% since 2024, including 70 new clients in 2025. The company attributed some of the acceleration to firms streamlining operations to support SMAs.
For emerging managers, that shift is redefining what “small” can look like. Instead of staffing up to meet institutional expectations, they can increasingly rent pieces — or all — of the operating stack: order and execution management systems, portfolio management tools, cybersecurity services, compliance support, and even help managing relationships with prime and execution brokers.
IIP’s model is to act as an aggregator and operator for the parts of a hedge fund that don’t generate alpha. Gogliormella said IIP aims to save managers and allocators money and time by purchasing institutional-grade software at wholesale prices and integrating it into a cohesive, ready-to-use system.
It also negotiates preferred rates with outsourced vendors across functions like trading support, legal, compliance, and IT.
The founders of Brabus Capital, a London-based systematic manager that uses IIP, recently told Business Insider that the outsourced setup let their firm operate at a scale on day one that would typically take a year to a year and a half to recreate from scratch.
For PMs, it’s akin to hiring a general contractor to manage the build of a new home rather than going to Home Depot and buying à la carte, Gogliormella said — without the sticker shock of budget overruns.
The firm’s client base includes more than a dozen managers and many allocators, Gogliormella said.
“We’re trying to help them build the business at a fraction of the cost,” Gogliormella said, as well as accelerate their speed to market and increase operational efficiency. Managers pay fees based on the complexity of their operation.
Spending potentially millions on middle- and back-office hires is a hurdle for smaller launches, but “allocators have become more accepting of the outsourced model,” Gogliormella said, a shift he noticed around 2020.
That flexibility hasn’t changed the non-negotiables. Allocators may be more comfortable with outsourced operations than they were a decade ago, but they’re not lowering the bar on controls, credibility, or diligence.
Shepherding would-be managers through the due diligence ringer, including allocators and brokers, is part of IIP’s hands-on approach. Even when capital comes via an SMA rather than a commingled fund, due diligence can include detailed reviews of cybersecurity, incident-response procedures, and physical security and access controls.
In other words, the infrastructure may be easier to rent than it used to be, but the scrutiny hasn’t gone away.
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