Working with a separately managed account (SMA) is like tailoring custom clothing rather than purchasing it off the rack, but without the cost premium that usually comes with it. Every element is constructed around the client’s specific needs, resulting in a better fit, more appropriate function and a more efficient use of resources. Similarly, SMAs allow institutional investors to construct real estate portfolios precisely tailored to fit their specific risk and investment objectives, rather than adapting to a standardized commingled fund structure.
SMAs, in their simplest form, are investment structures in which a single investor owns and controls a dedicated portfolio of real estate assets. It is important to briefly recognize the difference between an SMA and a joint venture, as the latter includes co-investment from the manager. For the purposes of this piece, the term SMA is often used to refer to either structure, despite their distinct legal differences. Unlike comm
