Insight
Allocators’ Perspectives on Implementing Through Dedicated Managed Accounts
July 10, 2025
During Innocap’s recent Thought Leadership Summit in New York, Innocap President Joshua Kestler explored this topic with panelists Jeffrey Barnes, University of Virginia Investment Management Company (UVIMCO), Andrew Biggs, Ontario Teachers’ Pension Plan (OTPP) and Eric Nierenberg, Charles River Associates (formerly, the Chief Strategy Officer at MassPRIM).
From their initial decision to build a program through set-up and results, the panelists shared their experiences with investing through DMAs in their hedge fund programs.
During this engaging panel discussion, 70 institutional allocators gained insights into three different use cases that highlighted the flexibility of DMAs, showing how the structure addresses various strategic needs:
| Use case 1 | Use case 2 | Use case 3 |
|---|---|---|
| Achieve greater asset control and fee and expense savings | Improve operational due diligence and overall fund governance | Ability to opportunistically add new strategies in a more capital efficient manner |
Although the objectives differed, the panelists agreed that DMAs are an optimal way to deploy a hedge fund strategy:
- Customization is a key reason for choosing DMAs. Allocators can build a customized portfolio to meet their investment objectives and can negotiate fees and other terms.
- DMAs improve transparency and risk management, at both a manager and portfolio level. The additional oversight and controls enhance fund governance.
- DMAs offer significant financial benefits, from reducing operational costs to improving cash and capital efficiency.
DMAs are increasingly being adopted by both allocators and asset managers. Allocators are using DMAs to invest in a wide variety of strategies, geographies, and across the spectrum of manager AUM from large institutional managers to smaller emerging managers.
Engaging with Innocap as a platform manager was also seen as a strategic decision by the panelists. The panel noted that Innocap made it easier to start a DMA program by taking the implementation and day-to-day operational burden off the allocator and its managers.
Allocators can rely on Innocap as an extension of their own staff, allowing their internal teams to focus on core functions, including manager selection, portfolio construction, as well as investment and risk management, while maintaining confidence that DMA onboarding, governance, daily operations, and oversight, as well as reporting, are managed by Innocap.
In fact, the panel’s key piece of advice for firms embarking on building a DMA program was to trust your platform provider as a partner. Fully leveraging Innocap’s legal, operational, investment, and risk expertise will enhance business operations without putting an additional strain on resources.
The session closed with a discussion of the unexpected benefits of DMA investing. The various benefits of transparency were the prominent theme with the following items mentioned:
- Detailed transparency on manager portfolios improved the efficiency of the allocator’s investment team and accelerated decision making.
- The position-level data and analytics offered by Innocap provide deeper insights and understanding of the portfolio than would have been expected.
- Access to position-level data and risk analysis resulted in an overall improvement in the quality of manager discussions and the overall due diligence process.
In summary, although the initial objectives of each allocator varied, their experiences with DMAs and Innocap highlighted commonalities – the efficiency, transparency, and flexibility of the DMA structure along with the benefits of working with an experienced partner.