Definition of Asset Management Company
The Asset Management Company invests of its clients’ funds in financial securities to achieve the financial objectives.
These companies provide more diversification to investors and manage the risk associated with the investment.
The asset management company invests funds on behalf of its clients by giving them access to a wide range of investment options which is not accessible for an average investor.
The prime objective of these companies is to maximize the profit for the company and investors. The investment can be made in both tangible and intangible assets such as human capital, intellectual property, goodwill, and financial instruments.
Asset management is an organized way of deploying, operating, maintaining, upgrading, and disposing of assets in a cost efficient manner. Furthermore, it involves the balancing of cost, opportunity and risk against the asset performance in order to achieve the organizational objectives.
Asset Management Companies usually hire asset managers for the management of assets. It is the prime responsibility of asset manager to conduct research. Statistical analysis of companies, and market trend for the determination of effective investment for company’s clients. Similarly, effective decision making and strategy are necessary to compete in the market and most financial professionals are judged on the basis of successfully managed assets.
Some of the common characteristics of Asset Management Company are as follows,
- Goal Setting
- Allocation of Fund
- Strategy Monitoring