A big-name separate account manager opts for outsourcing. Lazard Asset Management has outsourced its separately managed account (SMA) operations to Citigroup’s Global Transaction Services unit. The deal stands out even as the pace of outsourcing deals quickens because Lazard – with $13.6 billion in SMA assets under management across roughly 40,000 accounts – is the biggest manager in the retail separate account space to publicize such a deal.

Lazard is a top-10 SMA manager whether it’s grouped with providers to non-proprietary investment platforms such as Brandes and Lord Abbett or pitted against huge SMA management groups with proprietary distribution platforms like Citigroup Asset Management (soon to be part of Legg Mason) and Merrill Lynch Investment Managers, according to research by SEI Investments.

Short cut

“Being appointed by [Lazard] is evidence that we are providing the solutions asset managers are seeking in the SMA space,” says Neeraj Sahai, head of Citigroup’s securities and fund-service group.

Lazard COO Gerald Mazzari says the outsourcing arrangement lets his firm “confidently focus” on “delivering superior investment management results and service [to] our clients.”

Lazard is Citigroup’s third manager-side SMA client. News of the deal comes less than three weeks after Citigroup, the latest entrant in a crowded field of SMA middle- and back-office service providers, publicized a similar deal with Janus.

In deals going back 10 years, 23 managers have announced that they’ve outsourced their SMA operations. But such arrangements are becoming more common: Lazard is the fourteenth manager to board the outsourcing train in the past 12 months.

Lazard Asset Management is a subsidiary of London-based Lazard Ltd. It manages investments worth more than $73 billion for institutions and high-net-worth clients.

The articles below provide more analysis of SMA outsourcing trends and their impact on intermediaries. –FWR

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