Alternative Fund Insight Ep 44 - Innocap CEO François Rivard on how managed accounts are transforming the hedge fund industry
Sep 17, 2025
François Rivard, CEO of Innocap, shares his insights on the growing importance of dedicated managed accounts (DMAs) in the hedge fund industry. He discusses the key differences between SMAs and DMAs, highlighting four main drivers for allocators: customization, transparency, control, and capital efficiency. Rivard explains how DMAs help mitigate risks for emerging managers and are spurred by macroeconomic factors like volatility and AI. He also touches on the exciting future of hedge funds and Innocap's plans for expansion and tech upgrades.
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DMA Versus SMA Distinction
- A DMA is a single-investor, limited-liability fund that keeps assets segregated off the allocator's balance sheet.
- An SMA typically sits on the investor balance sheet and can expose that balance sheet to manager trading risk.
Four Drivers Behind DMA Growth
- Allocators demand customization, transparency and control, which DMAs provide through bespoke domiciles, mandates and normalized daily reporting.
- Rising rates added capital-efficiency as a fourth, economic driver that accelerates DMA adoption.
Capital Efficiency Example
- Rivard gives a concrete example: a $500m allocation split across five managers can save roughly $250m in funded capital via notional funding in DMAs.
- That freed capital can be held in cash, returned, or redeployed to boost portfolio returns.