Your capital in a pooled fund sits as a liability on someone else's balance sheet.
When redemption gates go up, that technical detail stops being abstract and starts being very real.
Most investors fixate on performance and fees.
Fund structure barely gets a glance. Until it matters.
In a pooled fund, you're a creditor with redemption rights, not an owner with control.
When market stress hits or the fund manager faces operational issues, those redemption rights can disappear. Gates. Suspensions. Lock-ups.
Your money. Their timeline.
Separately Managed Accounts (SMAs) change the equation.
Assets remain in your custody account. Your name. Your broker.
The investment manager trades under limited power of attorney but never touches principal.
You see every position, every trade, every P&L line.
Want out? You liquidate. No redemption queues. No monthly redemption windows. No manager credit risk.
This is not a theoretical argument about fund structure.
Pooled investment vehicles made sense when technology couldn't support personalized execution at scale.
That limitation no longer exists.
Modern portfolio management infrastructure enables institutional-grade execution across hundreds of SMA accounts simultaneously.
Today, pooling capital only makes sense if the trading strategy truly requires it for liquidity management or position sizing.
Most quantitative trading strategies do not.
Which raises the real question about capital allocation:
Are you being compensated for giving up structural control over your assets, or are you accepting pooled fund structures out of habit?
For capital you're building long-term, custody control and liquidity access are not negotiable.
Not financial advice