Getting SMA-Ready: A Practical Guide to Building Scalable Fund Infrastructure

For investment firms aiming to grow from their first SMA to a full platform with one or more commingled fund vehicles, scalable infrastructure is essential. As allocators raise the bar on operational expectations, managers must move quickly and confidently to build the systems, vendor networks, and legal processes that support both early execution and long-term success.

This blog outlines what investment managers need to focus on and timetable during three key phases of growth: Pre-SMA Allocation, Pre-Commingled Fund Launch, and Post-Commingled Fund Launch. With the right combination of technology and expertise, managers can accelerate time to market and build lasting operational resilience.

Phase 1: Pre-SMA Allocation (3–6 Months)

Prepare operational infrastructure ahead of SMA allocation

In the months leading up to your first allocation, investment managers must define and implement core infrastructure. This foundational phase ensures you’re operationally ready on day one.

Activities Include:

• Identify scope and timing of vendor needs

• Vendor evaluation and selection

• Negotiation of contract terms

• Establishing processes for ongoing vendor management

• Set up trade authorization with dealers

• Oversight of IMA contractual obligations

Typical Vendor Types:

Research, Data, Expert Networks, IT MSP, Compliance, Cybersecurity, OMS/PMS.

Phase 2: Pre-Commingled Fund Launch (Length of SMA Exclusivity Period)

i. Establish foundation for fundraising

As managers begin planning for a commingled fund launch, the focus shifts to positioning the firm for external capital raising. This includes organizing materials, responding to diligence requests, and laying the groundwork for allocator conversations—all while continuing to manage the SMA.

Activities Include:

• Virtual Data Room (VDR) set up for capital raising activities

• Introductions to Allocators

• Support for fulfilling incoming DDQ requests

ii. Build out infrastructure for trading

In parallel with fundraising, firms must begin building out the infrastructure required for the new fund’s day-one operations. This includes establishing relationships with counterparties and vendors at the fund level, executing necessary agreements, and preparing for regulatory obligations.

Activities Include:

• Fund Admin selection and negotiation

• Establish operating account at bank

• Counterparty selection & trade and financing agreement negotiations

• KYC and onboarding support (for trading counterparties and executing brokers)

• Adherence to regulatory requirements (e.g., DF Protocols, EMIR)

Key Agreement Types:

Admin, Deposit Accounts, Prime Brokerage, ISDA, MCA, Futures, Repo, Term Commitments.

Phase 3: Post-Commingled Fund Launch (Ongoing)

Implement Industry Best Practices for Ongoing Contract Management

Once live, managers must implement controls to oversee contracts, vendors, and compliance deliverables as the platform scales. This is where consistency and clarity matter most.

Activities Include:

• Consolidation of executed agreements

• Oversight of contractual renewals and deliverable obligations

• Continuity of contract management through personnel change

• Negotiating new and existing contracts

Partnering for Scalable, Technology-Driven Growth

From initial SMA preparation through commingled fund launch and long-term oversight, Quadrangle supports managers at every step—combining deep legal expertise with AI-Powered technology designed to simplify and streamline contract lifecycle management. Whether you’re selecting vendors, negotiating agreements, or building repeatable operational playbooks, our team ensures your infrastructure aligns with your firm’s growth.