What is an asset management firm?

Interested in a career in asset management? Get to grips with asset management firms and find out more about the part they play in the finance sector.

We’ll cover:

• What is asset management?
• What is an asset management firm?
• How do they differ from other firms in the sector?
• The types of roles in asset management
• The skills employers look for
• Key players

Asset management is the professional management of investments. It involves handling financial assets on behalf of others.

The meaning of asset management covers investing capital in both physical assets, such as property, and non-tangible assets, like stocks and shares.

When done well, it will maximise the value of assets over time.

Asset management firms are the organisations that manage funds for people and businesses. The firms make well-timed investment decisions on behalf of their clients to grow their finances and portfolios.

Working with a group of several investors, asset management firms diversify their clients’ portfolios. The diversification gives clients access to higher value options with better capital appreciation prospects. It also mitigates some of the risks associated with investments.

Asset management firms channel their clients’ pooled funds into various assets, including property, shares, bonds, and other investments (depending on their clients' financial objectives). For example, the stock market can deliver fast returns, whereas property is ideal for long-term asset management.

Financial firms can be roughly divided into two categories – those on the ‘buy’ side and those on the ‘sell’ side. Asset management firms differ from others as they’re on the ‘buy’ side.

Asset management firms focus on making smart purchasing decisions to increase the value of their clients’ funds.

Meanwhile, investment banks, brokerages and insurance firms focus on the ‘sell’ side. In those, it’s more about giving clients access to available stock purchases, advising on mergers and acquisitions and encouraging customers to take out policies – and less about helping clients buy.

Another difference is that although some asset management firms work with businesses, most of their clients are high-net-worth individuals. In contrast, other financial firms mainly work with larger companies.

Asset management firms are made up of key individuals who enable the business to attract, manage and act for its clients.

Some of the roles include:

Financial analysts research investment options, conduct due diligence on opportunities and determine when to buy and sell assets.

Economists keep a watchful eye on the current market. It’s essential for asset management firms to understand the latest financial happenings, so most have a dedicated economist.

Armed with insights from financial analysts and economists, asset managers have the final say in investment decisions.

What do asset managers do? Asset managers invest money for their clients and oversee the progress of their portfolios. To do their job effectively, they liaise with clients to understand their investment goals and then balance risk and reward to achieve their aims.

Sound like something you’d like to do? Check out our guide to asset and investment management graduate schemes.

If you’d like to work in an asset management firm, having the following skills will improve your chances of securing your dream role:

• Analytical abilities. You look behind the headlines and dig into the data to identify meaningful trends.
• Confident decision-making. You’re decisive and make informed choices based on facts.
• Strong communication. You’re great at explaining your decisions and can foster good relationships.
• Time management. You deal with pressure well and manage priorities.
• Initiative. You’re always on the lookout for new opportunities.

Keen to keep exploring the sector’s most valuable skills? Learn more about key investment and asset management skills and how to demonstrate them.

Many leading firms in the financial sector offer asset management as a service. Plus, various prestigious firms specialise in fund management.

Some of the key players in asset management are:

• BlackRock
• Insight Investment
• Schroders
• BNP Paribas
• Commerzbank AG
• Silicon Valley Bank

Want to discover more firms you could work for? Visit our guide to the leading graduate employers in asset and investment management.

Asset management is about investing on behalf of clients to help them get the most out of their money. While most asset management firms primarily work with high-net-worth individuals, some asset managers will also advise businesses.

Asset management shares elements with investment banking, due to the focus on investing. However, they differ because asset management focuses on the ‘buy’ side, while investment banks are mainly on the ‘sell’ side.

If asset management excites you, check out our article outlining how much you could earn as an investment and asset management graduate.