Investment management
Investment management (sometimes referred to more generally as asset management) is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or Real estate investment trusts.
The term investment management is often used to refer to the management of investment funds, most often specializing in private and public equity, real assets, alternative assets, and/or bonds. The more generic term asset management may refer to management of assets not necessarily primarily held for investment purposes.
Most investment management clients can be classified as either institutional or retail/advisory, depending on if the client is an institution or private individual/family trust. Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as money management or portfolio management within the context of "private banking". Wealth management by financial advisors takes a more holistic view of a client, with allocations to particular asset management strategies.
The term fund manager, or investment adviser in the United States, refers to both a firm that provides investment management services and to the individual who directs fund management decisions.[1]
The five largest asset managers are holding 22.7 percent of the externally held assets.[2] Nevertheless, the market concentration, measured via the Herfindahl-Hirschmann Index, could be estimated at 173.4 in 2018, showing that the industry is not very concentrated.[3]
Size of the global fund management industry[edit]
Conventional assets under management of the global fund management industry increased by 10% in 2010, to $79.3 trillion. Pension assets accounted for $29.9 trillion of the total, with $24.7 trillion invested in mutual funds and $24.6 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds, and exchange-traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled around $117 trillion. Growth in 2010 followed a 14% increase in the previous year and was due both to the recovery in equity markets during the year and an inflow of new funds.
The US remained by far the biggest source of funds, accounting for around a half of conventional assets under management or some $36 trillion. The UK was the second-largest centre in the world and by far the largest in Europe with around 8% of the global total.[4]
At the undergraduate level, several business schools and universities internationally offer "Investments" as a subject
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within their degree;
further, some universities, in fact, confer a specialist bachelor's degree, with title in "Investment Management" or in "Asset Management" or in "Financial Markets".
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Increasingly,
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those with aspirations to work as an investment manager, require further education beyond a bachelor's degree in business, finance, or economics.
There is much discussion as to the various factors that can affect the performance of an investment manager, including the manager's qualifications. Some conclude
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that there is no evidence that any particular qualification enhances the manager's ability to select investments that result in above-average returns. But see also Chartered Financial Analyst § Efficacy of the CFA program re related research.