What Is An Investment/ Fund Manager?
The investment manager is a professional who can work in investment funds or managing assets directly for his client. Therefore, to understand exactly what an investment manager is and what he does, it is essential to segment the performance of this professional into 2 main fields:
- investment fund manager;
- Personal asset manager.
Investment Fund Manager
The fund manager has the most important role in an investment fund: selecting the assets part of the fund’s portfolio. Therefore, this must be a specialized investment manager, highly qualified and experienced in the financial market.
The investment fund investor obtains returns from the valuation of his shares (less part of an investment fund). However, this share will only appreciate when the assets’ market value makes up the fund increase.
Therefore, the manager of an investment fund must recognize the best time to acquire and withdraw assets from the fund’s portfolio. The return delivered to investors depends a lot on the work of this investment professional.
Therefore, the fund’s profitability depends on this professional since, by delivering higher returns to investors, the fund manages to raise more resources through performance and administration fees and increase the demand for shares in the fund.
Personal Asset Manager
The work of the asset manager for Private Investment Network or asset manager works very similarly to a fund manager. However, in this case, clients do not seek to buy shares in the funds but instead, look for professionals who manage their resources to obtain the best possible results.
This service is usually more expensive for the investor’s pocket. But if the investor has good equity, it can be very worthwhile. Unlike a fund that makes an asset portfolio that will be identical for all shareholders, with the help of an asset manager, your investment portfolio can be customized entirely according to your preferences and needs. This professional meets with the client, asking about their financial goals, investment term, risk aversion, among other important information, to be able to develop a customized investment strategy for the client.
It is possible to say that when the client hires an asset manager, he is outsourcing the management of his assets. Therefore, this professional also has a very high responsibility for the financial future of his clients.
What is the work routine of an investment manager?
As exemplified in the two areas mentioned above, the investment manager has the hard work of developing an investment portfolio that enhances the results of its clients. Therefore, the level of information and knowledge about economics and investments that this professional must have is far above the average of other agents in the financial market. Thus, this investor can analyze available assets in-depth, defining the best assets to invest in and the best time to acquire them.
If this investment manager works in a stock fund, for example, usually, he will have to surpass a benchmark so that his job is done well. This is the main focus of an investment manager: surpassing the benchmark. The vast majority of investment funds define an economic-financial index to reference their performance.
If the manager manages to surpass the defined benchmark in a certain period, the fund’s profit will be increased through the performance fees charged to shareholders. In asset management, it is vital to surpass any benchmark defined by your client. Considering the high cost of the service, it is only advantageous for an asset manager’s clients to continue with this professional if he is delivering results above the market.