Knowledge Series: What is Asset Management? And How Does Mutual Fund Structure Work in Asset Management?
Asset management as the name suggests, is a process of managing funds, either for individuals or for companies. In asset management the investors capital is invested in diverse reserves like Bonds, Real Estate, Private Equity etc…, these asset management firms manage plenty of funds for either corporates or individual clients, within the lines of a particular mandate.
Asset management companies (AMC) could take care of these large funds either independently or by investing it in a fund run by them. Asset management companies run many funds which function with the objective of taking advantage of opportunities in a particular field or product or region, or in certain kind of company/industry, where they are sure about growth and expansion.
Asset management companies usually work with many investors and hence are able to diversify their client’s portfolios. This is a good thing as having a diverse pool of clients gives them greater value options, which in turn assures better capital appreciation opportunities, and thus mitigates the risks to an extent.
An asset management companies’ objective is that they strive to build the clients portfolio by making wise investment/purchasing decisions, which on a whole will build the capital value for their clients. This is different from others in the sector like insurance, mergers and acquisitions and stock purchases.
One will find many asset management companies working with ‘High Net Worth’ individual’s, who give them Unlimited Discretionary power or fiduciary powers in decision making.
Along with individual wealthy clients, asset management companies also have many corporate clients that they manage, these would essentially be Insurance Companies, Retail Banks, Pension Funds, who invest a large pool of individual savings to them, entrusting them to make investment decisions, for overall profits.
Asset Management firms stay profitable by charging a fee for managing their corporate or private clients, this is their method of earning revenue as unlike investment banks, asset management firms do not trade for profit. Since asset management firms, manage funds of retail banks, and pension funds in some sense they help us protect our money, and in turn provide a vital flow of capital to us, and the economy on a whole.
Asset management Companies are considered as one of the layers in the Mutual Funds Structure.
In the mutual fund structure, the asset management firm acts as the fund manager or like an investment manager to the overall trust. They take the fee to manage the funds and conduct all related activities, like initiating and launching the scheme, besides managing the funds, an asset management firm is also responsible for providing services to the unitholders or the investors. For example, an asset manager will liaise with elements like the broker, banker, auditor,
An asset management company has an assembly of individuals who engage and manage the business on behalf of the new clients. Some specific titles would be, Financial Analyst, Economist, Asset Managers etc…, Asset management has a wider scope for business and offers great appeal and opportunity for fresh graduates and experienced candidates both.
By Zenobia Sethna,
Imarticus Learning was created with a mission to bridge the gap between academia and the industry by providing job specific and industry relevant training. We are India’s leading Financial Services and Analytics professional education company and assist firms in meeting their human capital and skillset requirements through our range of bespoke training and staffing solutions.
Financial Markets: Financial markets are extremely important to the general health of an economy. Without effective markets for credit and capital, borrowing and investment will be limited and the whole macro-economy can suffer. Our programs on Financial Markets start off with the basics of capital markets for entry-level employees, and cover different financial markets and equity and debt instruments. For the more experienced learner, we offer advanced modules on pricing methodologies and trading strategies for various instruments. We also offer ‘deep dives’ into more complex products such as CDOs, swaptions and other structured products for the serious practitioner.
Capital Market Operations: At the heart of every Investment bank is a dedicated Support team spanning across Operations, Finance, Product Control, among others, which is responsible for the management and execution of millions of securities transactions on a daily basis. The quality of Operations will drive banks’ ability to actually operate profitably. Our training programs provide comprehensive, hands-on understanding of the critical control points in the smooth functioning of global capital markets. Learn about trade life cycle of securities, liquidity and collateral management, documentation, risk and control.
Corporate finance: Corporate finance, which encompasses Investment Banking and Research, is the field of finance which deals with financial decisions that business enterprises make and the tools and analysis used to make these decisions. Investment Banking has got to be one of the most glamorous and aspirational careers in Finance – The biggest deals on Wall Street and other stock markets in the world are brought to the table by investment bankers and they are virtually behind all financial transactions that move the stock markets including security offerings, mergers and acquisitions and IPOs.
Corporate & Retail Banking: Retail and corporate banks are of critical importance to the domestic and global economies. Retail banking brings in the customer deposits that largely enable banks to make loans to their retail and business customers. Corporate banks, for their part, make the loans that enable businesses to grow and hire people, contributing to expansion of the economy. For proof of the importance of banks to the economy, one needs to look no further than the global credit crisis of 2007-08. Our retail banking portfolio covers both behavioural and product specific trainings on topics such as loans, bank cards, as well as bank operations and regulations. On the corporate banking side, we offer specialized courses on commercial lending, trade finance, structured finance, payment systems among others.
Asset and Wealth Management: Meeting the needs of increasingly sophisticated private clients in a turbulent investment environment is a challenge all private wealth and asset managers face. This represents a real opportunity but also a potential threat for many organizations. Only if your asset managers sufficiently understand the key issues and trends can they generate business and grow their assets under management. In response to these market developments we have developed a number of programs suited to your exacting requirements, including asset allocation, portfolio management, fund administration and tax provisioning and asset classes like mutual funds and hedge funds.
Finance and Accounting: Finance, Accounting and Budgeting skills have never been more important. Companies now face increased global competition, unpredictable costs and sales revenue as well as volatile market conditions in term oil prices, interest rates and FX rates. Our programs on Finance and Accounting will provide the essential knowledge and practical skills to enable candidates to manage costs and budgets, maximise revenues and reduce financial risks.
Insurance: The insurance industry in India and globally is in flux. Rapid changes in demographics, disruptive technological advances, over-regulation, and the entrance into the market from traditional financial services companies are presenting significant risks for growth throughout the industry. Imarticus provide comprehensive insurance sales training solutions, enabling your team to reach next levels of success within today’s rapidly changing environment.
Risk Management: Risk management has emerged as a very important component to a firm’s financial well-being. In order to stay viable, firms need to determine which risks they are exposed to, which risk the firm should keep, moderate, or ultimately eliminate. While there is increased focus on risk mitigation in India, few still have the in-depth know-how or the practical knowledge on how to mitigate risk effectively.
Follow Us On Social Media