The role of an asset management company in brief

While both investment banking and asset management are important for the financial growth of a firm and of any business, both these verticals have some key differences. We shall be exploring the same today, although stressing more on the functions of any asset management company. One of the major functions of the asset management companies is that they become an intermediate not just for individual clients and households, government or big business firms. But they also help other categories, more specifically insurance companies and pension funds. As the financial companies or institutions that direct or influence the decisions for investors who choose to get professional help in managing their clients, the asset management company becomes an important buy side institution type.

Another major function of the asset management company is allocation of funds and assets. The mutual funds that everybody talk about comes with a specific aim in the financial terms, which would help the asset manager (on behalf of the client) to decide by shortlisting the best assets to invest in in terms of the returns they are known to give. They are so many funds that are debt oriented that do not put any more than twenty percent of assets in any inequities of undermanagement. A fund that is balanced, could invest 60 percent of asset inequities. This forms one of the crucial decisions that an asset manager you hire needs to make. On the other hand, when it comes to investment banking, the investment banking companies focus on raising capital or finance for their clients, who may be individual, governmental, large sized private firms or so on.

Asset management also involves a lot of R&A, that is, Research and Analysis. The asset manager needs to carefully study and analyse the current market situation, micro plus macro-economic aspects and even the performance of various funds that they advise their clients to invest in.