By Author: Avendus
Asset management is a branch of finance that help the high net individuals on private and government corporations in procuring, operating, updating and maintaining assets. An asset is anything that is valuable and sees an increase in its value gradually over the years. An asset adds to the wealth of an individual or a firm and makes them affluent in their own ways. Asset management companies or anywhere outside in the world, focus on expanding the financing strength and portfolio of the client. The current financial statements and transactions are studied carefully by the asset manager. After this, he or she, makes a tentative plan for meeting the financial goals and requirements of the client in fixed time period.
Asset management or fund management gives the permission to the managers handling client portfolios into making investment decisions for them. These asset managers are well qualified and have the ability to figure what asset will see a surge in its value in the years to come and invest the client’s money in that. Similarly, if they see that there is going to be a deflation in the value of assets, then they take the client’s money out of the investment. The asset manager has to be someone who has analytical skills, so that they can look through the headlines and identify any potential trends in the market. They also need to have confidence in their decision making especially because the health of their client’s financial portfolio heavily depends on their calculated decisions. Along with this, the asset managers should also have great communication skills so that they can explain details on investment to their client and also answer their concerns in case of crisis.
If you check out the investment banking companies, you will see that they do perform the function of asset management as well. Investment banking is, however, a very different and vast subject. In investment banking, managers help their clients raise capital and go public. Although the money that comes with investment banking is higher than what we get might get in asset management, investment banking needs to the banker to be vigilant, alert and have a sharp attention to details in order to be able to predict any kind of upcoming trend.
Investment banking firms typically help in the merger and acquisitions of firms, underwriting, investment in stocks, shares and bonds, assist the firm in going public, ESG funds, and also provide guidance to the issuers regarding placement and issue of stock. Especially in investment banking, it is very important that the investment bankers identify any kind of potential risks that may arise in the market. They serve as the middle link between the investors and the company, when the company wants to issue any kind of bonds and stocks.
Be it investment banking or asset management, as a company or an HNI, it is important that you choose the firm very meticulously, since you will be placing the reigns of big part of your money in their hands.