Asset Management is an investment banking area that helps clients with investment management and strategic advice. The ultimate goal is to help clients achieve their financial goals. In other words, asset managers use clients’ money to make more money. An individual or institution is likely to approach the asset management division of an investment bank when their investment income is substantial.
In such cases, asset managers can offer expertise across a broad spectrum of asset classes such as stocks, bonds, commodities, real estate, private equity, etc…
Large banks have branches all over the world, which enables additional diversification opportunities. In most cases, clients receive comprehensive service. Asset managers study their needs, create an actionable investment strategy, implement it, and oversee its development over time. When building a client’s portfolio, asset managers consider a broad range of asset classes.
For example, different types of stocks can be included based on a client’s risk profile. Some are small-cap, large-cap, blue-chip dividend stocks or stocks from such growth regions as the BRIC countries. Several types of bonds can also be incorporated, including short-maturity, long-maturity, corporate bonds, government bonds, etc…
In addition, in some cases, asset managers may invest in commodities, real estate, and other alternative investment asset classes such as private equity, hedge funds, and even art. Each of these investment opportunities is part of the equation that determines how to allocate a client’s money. The art of this profession is to maximize return without taking additional risks.
There’s a wide range of roles within an asset management division. The sales force establishes client relationships and understands clients’ needs. Portfolio managers are ultimately responsible for making investment decisions to make informed decisions. Portfolio managers use the input of the research department in which people with a specific industry, product, or geographical expertise can be consulted. This was our short overview of the asset management business line.
