An asset management company successfully serves the investment needs of an organisation and high-net-worth individuals. They do so by placing their deposited amount into the money market funds for generating higher returns.
Their working process involves the following steps:
Step 1: Identify and Evaluate the Assets
Before managing the assets, an asset manager should primarily identify the types of assets available and what should be done with them.
After the identification of assets, they will evaluate each asset by analysing financial statements and other information relevant to it. This will help in determining the actual value of the assets.
Step 2: Classify and Select the Assets
After doing so, the assets should be classified depending on their return potential, liquidity, and level of risk involved. Through this classification, the asset manager will be able to access the best investment strategy as per the individual assets.
Now, the asset manager will consider the risk tolerance, time horizon, and objectives of the investor. Based on these factors, they will choose the most appropriate asset that should be included in the client’s investment portfolio.
Step 3: Asset Maintenance
After the selection of assets, the asset manager will monitor and evaluate the asset’s performance on a regular basis. They will also evaluate the asset’s depreciation rates, their overall impact, and the potential risks associated with each of them.
This will help them in assessing whether the assets are performing as per their expectations or not. Thus, they will be able to make the necessary adjustments as and when required.
Step 4: Predict the Asset Value
Here the manager analyses the economic indicators and trends in the market to predict the asset’s future value.
