A quick presentation of the Asset Management field…
In this article, Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains what does an Asset Management company consists in.
What does Asset Management consist in?
Asset management is a financial activity whose objective is to create, manage, grow and maximize the benefits of financial products or investments entrusted by companies or individual investors. Asset management therefore consists in managing a client portfolio and increasing its profitability by balancing expected returns and risks in order to achieve previously defined objectives.
When thinking about asset management, companies such as Allianz, Amundi, AVIVA or Natixis Investment Managers could be quoted as examples of Asset Management companies.
What are the main clients of Asset Managers?
The main clients of asset management companies are :
– Companies wishing to invest their cash surpluses;
– Pension funds and mutual insurance companies;
– Financial institutions investing for their own account;
– Banks and insurance companies that distribute financial products to their clients (retail, private and corporate banking).
Two main types of management
Management under mandate
The company manages the account of a single client or a group of clients who have delegated the management of the fund to it. All of the fund’s assets belong to one person or to a small number of people,
A fund with a large number of investors and units. It is managed according to the same strategic orientation corresponding to the profile adapted to these investors.
What does an asset manager work on?
The day-to-day work consists mainly of assessing how the previous day’s transactions and market movements have affected the portfolio’s risk profile in terms of liquidity, credit and market.
Another key aspect of this job is the development, adaptation and improvement of quantitative portfolio risk analysis tools. Other tools to assist investment decisions, to monitor developments in financial research in terms of risk and to analyze macroeconomic news require more specific attention and are therefore more complex to implement.
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About the author
The article was written in May 2022 by Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023).