Managing memory capacity in virtualized environments is still a challenging problem. Many solutions have been proposed and implemented, including memory ballooning and memory hotplug. But these mechanisms are slow to respond to changes in virtual machine (VM) memory demands. Transcendent Memory (tmem) was introduced to improve responsiveness in memory provisioning, by pooling idle and fallow memory in the hypervisor, and making these physical pages available as additional memory for the VMs through a key-value store. However, tmem presents some limitations of its own. State-of-the-art hypervisors do not implement any efficient way to manage tmem capacity, letting VMs compete for it in a greedy way by default, regardless of their actual memory demand. In this paper, we demonstrate the need for intelligent memory capacity management for tmem, and we present the design and implementation of SmarTmem, a mechanism that integrates coarse-grained user-space memory management with fine-grain allocation and enforcement at the virtualization layer. Our results show that our solution can improve the running time of applications from the Cloudsuite benchmarks by up to 35% compared to the default tmem allocation mechanism.