Asset management

what is investment management

The process of making decisions about how to invest money in assets such as shares, bonds, or property with the aim of growing wealth or achieving specific financial goals over time, while managing risk

Asset owners

Individuals or organisations that own money or investments

They want their funds to grow or provide income over time

They decide what their financial goals are and then often hire investment managers

Investment managers

Professionals that make investment decisions on behalf of asset owners. Decide where to invest money and managing risk to help meet the asset owner’s goals

Portfolio construction

How different investments are selected and put together into one portfolio

Asset allocation

How money is split across different asst types

Risk management

How investment risk is identified, monitored and controlled to avoid large losses

Types of investment management firms

Asset management

Private equity - money into private companies to help them grow or improve with the goal of selling them later for a profit

Hedge funds - higher risk and more flexible than traditional asset management

venture capital - investing in early stage or startup companies with high growth potential in exchange for ownership

family offices - manage investments and finances for wealthy families

wealth managers - help individuals manage their money

Asset classes

Equities

Fixed income

Privately owned companies

Alternative assets - Real estate, infrastructure, private debt

equities

Shares of ownership in companies that are traded on public stock exchanges. When you buy equities, you own a small part of the company and may benefit from share price growth and dividends.

Fixed Income

Loans made to governments or companies. In return, investors receive regular interest payments and get their original money back at maturity. Bonds

Privately owned companies

Businesses that are not listed on a public stock exchange. Investments in these companies are usually made through private equity or venture capital and are typically held for the long term

Alternative assets

Investments outside traditional shares and bonds, often used to diversify portfolios

Real estate: investment in property such ass offices, housing or retail spaces

Infrastructure: investment in essential assets like road, energy and utilities

Private debt: lending money directly to companies outside public markets

Key differenced between fixed income and private debt

FI is usually publicly traded, relatively liquid , lower return

UK’s investment firms

Legal & general investment management

schroders

Baillie Gifford

M&G Investments

Aberdeen Investments

Fiduciary Duty

Legal and ethical obligation to act in the best interests of the client

retail vs institutional investors

Retail are individuals investing their own money

Institutional are large organisations like pension funds or insurance companies investing large sums of money