What does an asset manager do?

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What is an Asset Manager?

While portfolio managers solely handle their clients’ financial investments, asset managers manage a broader range of holdings on behalf of their clients, which can include individuals, corporations, institutions, pension funds, and governments. These professionals manage everything with monetary value, not only investments such as securities, mutual funds, exchange-traded funds (ETFs), and other financial instruments, but also cash and other tangible assets like land, property, and items of value.

Asset managers, it might be said, take a holistic view of the financial, investment, and personal net worth landscape. Their focus is on coordinating all resources owned by their client that should provide a future benefit. And their goal is to maximize the returns from the pool of those resources.

What does an Asset Manager do?

An asset manager analyzing financial statements.

Duties and Responsibilities
The specific duties of an asset manager can vary depending on the client's investment objectives, the types of assets being managed, and the asset manager's investment strategy. However, some general responsibilities of an asset manager include:

  • Analyzing client financial statements
  • Conducting research and analysis to identify investment opportunities and make informed investment decisions
  • Collaborating with research analysts
  • Developing investment strategies and asset allocation plans that align with the client's investment objectives
  • Monitoring market trends and economic indicators to adjust investment strategies as needed
  • Maintaining a diversified portfolio of assets to manage risk and maximize returns
  • Evaluating the performance of investments and making recommendations to buy, hold, or sell assets
  • Communicating with clients to provide updates on investment performance, market conditions, and investment strategies
  • Ensuring compliance with regulatory requirements and ethical standards
  • Managing investment operations such as trade execution, settlement, and custodial services

To get a clear sense of the potential scope of the asset manager’s job, let’s take a look at the wide range of assets that they may be responsible for managing, buying, and/or selling:

Tangible assets are physical and measurable assets. They include:

  • Land
  • Vehicles
  • Equipment
  • Machinery
  • Furniture
  • Art
  • Jewelry
  • Inventory
  • Securities like stocks, bonds, and cash

Intangible assets are typically non-physical assets, which can be far more valuable than tangible assets. They are often intellectual assets, and as a result, it can sometimes be difficult to assign a value to them because of the uncertainty of future benefits. The following are examples of intangible assets:

  • Patents, which provide property rights to an inventor
  • Trademarks, which are recognizable phrases or symbols that denote a specific product and differentiate a company
  • Franchises, which are a type of license that a party (franchisee) buys to allow them to have access to a company’s brand and sell goods under their name
  • Goodwill, which represents anything above and beyond the net value of the target company’s identifiable assets that another company pays to acquire them
  • Copyrights, which represent intellectual property that is protected from being duplicated by non-authorized parties

Intangible assets may also include internet domain names, performance events, licensing agreement, service contracts, computer software, blueprints, manuscripts, joint ventures, medical records, permits, and trade secrets.

Types of Asset Managers
As demonstrated above, asset managers can be tasked with managing an especially wide range of assets. On the other hand, they may choose to specialize and focus on a particular kind of asset. Here is a snapshot of the most common types of asset managers:

  • Equity Asset Managers specialize in managing equity investments such as stocks and shares.
  • Fixed Income Asset Managers specialize in managing fixed income investments such as bonds and other debt securities.
  • Real Estate Asset Managers specialize in managing real estate investments such as commercial properties, residential properties, and real estate investment trusts (REITs).
  • Alternative Asset Managers specialize in managing alternative investments such as private equity, hedge funds, commodities, and infrastructure.
  • Multi-Asset Managers specialize in managing portfolios that contain a mix of different types of assets, such as equities, fixed income, and alternative investments.
  • Private Wealth Managers work with high-net-worth individuals and families to manage their investments and provide financial planning services.
  • Institutional Asset Managers work with large institutions such as pension funds, endowments, and foundations to manage their investments.
  • Digital Asset Managers manage non-financial assets in digital form, such as images, videos, documents, and multimedia content.

Asset managers may differentiate themselves further by specializing in even more targeted services. Here are some examples:

  • Sustainable investing – Asset managers that specialize in sustainable investing incorporate environmental, social, and governance (ESG) factors into their investment decisions to promote sustainability and social responsibility.
  • Emerging markets – Asset managers that specialize in emerging markets invest in securities in developing countries, which can provide higher returns but also come with higher risks.
  • Factor-based investing – Asset managers that specialize in factor-based investing use quantitative models to identify and invest in securities that exhibit specific characteristics, such as low volatility or high dividends.
  • Risk management – Asset managers that specialize in risk management use sophisticated models to identify, measure, and manage investment risks to help clients minimize losses and protect their investments.

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What is the workplace of an Asset Manager like?

Asset managers can be employed by a wide range of organizations that require investment expertise to manage their assets and investments:

  • Investment management firms – These firms specialize in managing investments and assets on behalf of clients, and typically employ a range of asset managers with different specializations.
  • Banks – Many banks have asset management divisions that offer financial services to clients, and employ asset managers to manage investments and other assets.
  • Insurance companies – Insurance companies may employ asset managers to manage large investment/asset portfolios that support their business operations.
  • Pension funds – Pension funds employ asset managers to manage their investment/asset portfolios and ensure that they are meeting their long-term funding goals.
  • Endowments and foundations – These organizations typically have large investment/asset portfolios that support their charitable or philanthropic activities, and may employ asset managers to manage those portfolios.
  • Governments – Governments may employ asset managers to manage funds such as sovereign wealth funds or public pension funds within their investment/asset portfolios.

Asset managers typically work in offices, in a professional setting that is conducive to making investment and asset allocation decisions. The asset management environment is intellectually stimulating and fast-paced, and generally involves long hours of research and analysis.

Frequently Asked Questions