Roles of an Asset Management Company

When we think of an asset management company, the first thing that comes to mind is- what does it do and how is its role different from managing your own assets? An asset management company is an organisation that collectively invests its clients’ funds into assets like bonds, stocks, hedge funds, property, partnerships, etc. It examines all financial lawsuits, creditors, court judgements and investment opportunities for its clients.

On the other hand, managing your own assets might involve similar tasks, but it can often have a smaller scope, lack expertise and thereby have a higher risk of error.

An asset management company has various roles that it takes care of simultaneously. One of its most important jobs is to extract data, translate it and use it while making any investments. Further, it develops detailed processes, procedures and policies that act as rubrics for the kind of projects its clients choose to invest in. It is essential for the company to understand the requirements of the brands it works for, as the solutions to all their problems can be varied. In addition to all of this, asset management companies must maintain a good database that records trends which have previously prevailed in the market. This helps them forecast the changes that may occur in the financial environment in the coming future.

It has been noticed that asset management as a function is often handled by full-service investment banking firms in India. This is because such a situation allows centralised management of funds and gives the client the power to have a holistic view of their monetary standing. It also ensures that all functions sync towards a common goal and the brand has a single investment plan instead of having several smaller ones. Such a scenario eliminates duplication of research and cuts down on costs, making the whole process even more effective.