ASSET MANAGEMENT

What is Asset Management?

Asset management is the direction of all or
part of a client's portfolio by a financial
services institution, usually an investment
bank, or an individual. Institutions offer
investment services along with a wide range
of traditional and alternative product offerings
that might not be available to the average
investor.
Understanding Asset
Management
• Asset management refers to the management of
investments on behalf of others.
• The goal is to grow a client's portfolio over time
while mitigating risk.
• Asset management is a service offered by financial
institutions catering to high net-worth individuals,
government entities, corporations and financial
intermediaries.
 Asset management has two
general definitions, one relating
to Advisory Services and the
other relating to Corporate
Finance.
In the first instance, an advisor or financial
services company provides asset
management by coordinating and
overseeing a client's financial portfolio.

Example:

• Investments • Insurance
• Budgets • Taxes
• Accounts
In corporate finance, asset management
is the process of ensuring that a
company's tangible and intangible assets
are maintained, accounted for, and put to
their highest and best use.
How Does Asset
Management Work?
An asset management company serving as an
advisor to a client has one overriding goal;
to substantially grow its client's portfolio.

Asset managers are often hired by

institutional investors like pension funds,
corporations, and financial intermediaries, as
well as high net worth individuals.
 Asset managers conduct research,
interviews, and statistical analyses of
companies, markets, and trends in order to
determine what investments to make or
avoid on behalf of their clients. Asset
managers do not generally need "asset
manager" licenses, though the firms that
hire these managers often require
registration with one or more exchanges
and/or the National Association of
Securities Dealers (NASD).
In corporate finance, asset management
requires finding ways to maximize a
company's value by managing fixed and
intangible assets to be more reliable,
efficient, or cheaper -- including
evaluating asset financing options, asset
accounting methods, productions
operation management, and
maintenance discipline.
Why Does Asset
Management Matter?
Although most financial jobs
don't carry an official "asset
manager" title, the truth is
that nearly everyone in the
finance world is an asset
manager.
 As a result, most financial
professionals are judged on their
ability to successfully manage assets
-- either directly or indirectly.
Proficiency in asset management
makes the difference between a
mediocre and a stellar performance
at both the individual and corporate
levels.
 The Importance of Asset
Management

There are several reasons why

businesses should be concerned
about asset management, including:
1. Enables a firm to keep tabs on
all of its assets
The process makes it easy for organizations to
keep track of their assets, whether liquid or
fixed. Firm owners will know where the assets
are located, how they are being put to use,
and whether there are changes made to them.
Consequently, the recovery of assets can be
done more efficiently, hence, leading to higher
returns.
2. Helps guarantee the accuracy
of amortization rates

Since assets are checked on a regular

basis, the process of asset
managment ensures that the
financial statements associated with
them are kept updated.
3. Helps identify and manage risks
Asset management encompasses the
identification and management of risks
that arise from the utilization and
ownership of certain assets. It means
that a firm will always be prepared to
counter any risk that comes its way.
4. Removes ghost assets in the
company’s inventory

Instances exist where lost, damaged, or

stolen assets are still recorded on the
books. With a strategic asset
management plan, the firm’s owners will
be aware of the assets that have been
lost and, thus, not keep recording them
in the books.