Investment management (or financial management) is the professional asset management of various securities (shares, bonds, and other securities) and other assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes).
Investment management has two general definitions, one relating to advisory services and the other relating to corporate finance. In the first instance, a financial advisor or financial services company provides investment management by coordinating and overseeing a client’s financial portfolio — e.g., investments, budgets, accounts, insurance, and taxes.
In corporate finance, investment 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.
In other words, this term most often refers to portfolio management and the trading of securities to achieve a specific investment objective. Investment management – also referred to as money management, portfolio management or private banking – covers the professional management of different securities and assets, such as bonds, shares, real estate and other securities.
How Investment Management Serves
An investment management company serving as an advisor to a client has one overriding goal — to substantially grow its client’s portfolio. Investment managers are often hired by institutional investors like pension funds, corporations, and financial intermediaries, as well as high net worth individuals.
Investment management is a booming industry responsible for the handling and generation of large quantities of money. and for vast numbers of monetary transactions across the globe. Investment management services include elements of asset and stock selection, financial analysis and continuous monitoring of investments, and the implementation of investment plans. As a part of financial services provided, investment management companies are today employing investment or fund managers and staff in great numbers and focusing on generating impressive revenues.
key Tasks of Investment Management
1- Assess clients’ financial goals and attitude to risk
Investment management firms need key information such as how much the client has to invest, how much return they want when they’ll need to access their money, and how much they’re willing to risk losing.
2- Monitor potential investments
Investments range from cash deposits and government bonds to shares in new companies with unpredictable futures. An investment management company needs to be aware of the possibilities and calculate the investment risks and returns of each. That’s the job of an investment analyst.
3- Create investment strategies
Each client needs a portfolio of investments that match their goals. A diverse portfolio, with investments spread across many different assets, reduces risk – it’s a case of not putting all your eggs in one basket.
That’s the basic outline of an investment firm’s business. There are a huge number of ways to go about it. Firms might manage investment funds for multiple investors. They might invest in private equity. And there are other tasks for the firm, such as business development and marketing, IT, pricing and accounting.