An investment management firm takes the necessary investment management tools on behalf of the clients while making investments in the financial market. The investment manager appointed by the investment management firm takes all the decisions on investment options.
The investment management firms take care of the asset management or fund management needs of their clients. The investment management includes the management of securities and assets of either a corporation or sometime of individual investors in form of the pooled fund like that of mutual funds.
The investment company also goes for the financial analysis of the fund while doing asset selection, stock selection and implementation planning at the same time. Asset allocation is the major task handled by the investment management companies as according to some economic researches the asset allocation has more predictive power of the success of the fund, even more than the choice of private holdings.
The assets may be classified into stocks, bonds, real estates and commodities and each class of asset has its own market dynamics and interaction effect.
The most challenging job of the investment manager is to allocate the asset and this is where the professional skill of a successful fund manager lies. In the allocation of assets, the concept of diversification also matters in the investment management industry. According to the theory of portfolio diversification given by Markowitz, the effective diversification needs the correlation management between the liability returns and asset returns. Depending on the degree of diversification, the fund manager makes a list of planned holdings and with a reference to that list decides on the percentage of the fund that should be invested in a particular stock or bond.
The investment management firms go for the fund performance measurement, which is used to make the process of fund management more accurate and perfect. The investment management firm generally measures the performance of each fund under their careful watch. There are many other external firms who specialize in fund performance measurement.
As the investment management industry is in flourishing state, the investment management firms are also growing at a rapid pace.
Here is a list of ten largest investment management firms:
Deutsche Asset Management
State Street Global Advisors
Barclays Global Investors
Capital Group Companies
The Vanguard Group
JPMorgan Asset Management
Allianz Global Investors
Bank of New York Mellon
Last Updated on : 5th July 2013