What Do Asset Management Companies Do?

By Author: avendusgroup
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Asset management is the process of managing funds and assets for individuals and companies. The finance companies involved in this line of business make timely investment decisions for their clients and work to add value to their portfolio and finances. An asset manager basically manages assets on behalf of others and works diligently to ensure that these assets are devalued due to the fluctuations in the market. In order to do this, asset managers have to be constantly updated on recent developments in the market, political, financial, and economic news that might affect the market. Asset management companies normally work with a group of investors, this gives them the liberty to diversify the portfolio of their clients to suit different needs. Depending upon the financial objectives and goals of the client, the asset managers diversify the portfolio in different investment banking options like bonds, securities, stocks, equity, real estate, etc. While some of these investment options aim at getting immediate results, others are long-term investments. The diversification of the portfolio also ensures the value of their client’s ...
... capital is depreciated; this is because of mitigation of risk. Let us take a look at why asset management companies are important and how they add value:

The strategy of asset management companies entirely depends on the requirements of the clients, and also on various factors like cost of ownership, depreciation, market conditions, etc. Most commonly, asset managers cater to long term investments, either in properties or investment strategies like long short funds. There are also different types of asset management, while speaking under the umbrella term of banking and finance, asset management refers to the management of financial assets through intelligent investment. Property asset management, on the other hand, is more about managing the physical assets of a client, while there is also asset management in inventory and stock.

There are also numerous asset management companies in India that increase their scope of work depending on the client, it is common for some companies to work extensively with their clients. Apart from having inventory and asset control, asset managers also work with accounting, filing returns, and paying taxes for their clients. There have also been major advancements in the field of asset management, especially in terms of maintaining records. What was done on pen and paper earlier, can be done online with the help of asset management software. Through this software, asset managers can keep constant track of their clients’ assets and compile all the relevant data into comprehensive reports.

The major difference between asset management and investment banking firms is that while the earlier focus on the ‘buy’ side of the financial world, the latter focuses on ‘sell’. This means that asset management firms look to add long-term value for their clients by making investment decisions on what, when, and how much to buy. Investment bankers are also involved by raising short-term funds as per the requirement of their clients, for example underwriting for an IPO. Asset management companies cater to large corporations and high net-worth individuals who trust the expertise of the asset managers to come up with a portfolio that not only effectively adds value, but also efficiently mitigates risk.