[1] It is a solution often offered by big asset management divisions from investment banks but also independent alternative asset managers like hedge fund firms or private equity firms.
Such a case may be when the investor has some leverage, e.g., a pension fund who commits hundreds of millions of dollars every 5 years to a single firm.
[3] The assumption underpinning MoM is that diversification and balance can be achieved more readily by having a group of specialists, instead of one or multiple in house individuals who are solely employed for the purpose of proprietary investing.
In addition, the e.g., pension fund manager may lack experience in certain asset classes or the operational aspect of an alternative investing division.
The additional advantages associated with a Separately Managed Account, still allow the investor to construct a portfolio according to their needs and guidelines.