# Investment management Canonical: https://web4.xpay.bi/en/wiki/wp-en-1557851/ Language: en Published: 2026-10-25T17:13:59.817Z Updated: 2026-10-25T17:13:59.817Z Investment management (sometimes referred to more generally as financial 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, edu ## Key facts ## Overview Investment management (sometimes referred to more generally as financial 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. Professionals working in investment management commonly hold undergraduate degrees in fields such as finance, mathematics, or accounting, and may also obtain advanced degrees or professional certifications. Their services can include advising clients on financial planning and investment strategies, including services associated with wealth management for high-net-worth individuals. Certain investment management activities in the United States are regulated by authorities such as the U.S. Securities and Exchange Commission. Investment professionals may also obtain industry certifications, including the Chartered Financial Analyst (CFA) designation. Fund managers, or investment advisers in the United States, are generally considered fiduciaries and are required to act in the best interests of their clients. ## Amount available for investment The amount available for investing oblige to use different type of investment and my not allow yet to reach directly an Investment manager . 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. The five largest asset managers are holding 22.7 percent of the externally held assets. 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. ## Industry scope The business of investment has several facets, the employment of professional fund managers, research (of individual assets and asset classes), dealing, settlement, marketing, internal auditing, and the preparation of reports for clients. The largest financial fund managers are firms that exhibit all the complexity their size demands. Apart from the people who bring in the money (marketers) and the people who direct investment (the fund managers), there are compliance staff (to ensure accord with legislative and regulatory constraints), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to account for the institutions' own money and costs), computer experts, and "back office" employees (to track and record transactions and fund valuations for up to thousands of clients per institution). ## Key problems of running such businesses Key problems include: Revenue is directly linked to market valuations, so a major fall in asset prices can cause a precipitous decline in revenues relative to costs. Above-average fund performance is difficult to sustain, and clients may not be patient during times of poor performance. Successful fund managers are expensive and may be headhunted by competitors. Above-average fund performance appears to be dependent on the unique skills of the fund manager; however, clients are often reluctant to stake their investments on the ability of a few individuals- they would rather see firm-wide success, attributable to a single philosophy and internal discipline. Analysts who generate above-average returns often become sufficiently wealthy that they avoid corporate employment in favor of managing their personal portfolios. ## Representing the owners of shares Institutions often control huge shareholdings. In most cases, they are acting as fiduciary agents rather than principals (direct owners). The owners of shares theoretically have great power to alter the companies via the voting rights the shares carry and the consequent ability to pressure managements, and if necessary out-vote them at annual and other meetings. In practice, the ultimate owners of shares often do not exercise the power they collectively hold (because the owners are many, each with small holdings); financial institutions (as agents) sometimes do. Institutional shareholders should exercise more active influence over the companies in which they hold shares (e.g., to hold managers to account, to ensure Board's effective functioning). Such action would add a pressure group to those (the regulators and the Board) overseeing management. However, there is the problem of how the institution should exercise this power. One way is for the institution to decide; another is for it to poll its beneficiaries. Assuming that the institution chooses to poll, should it then: (i) Vote the entire holding as directed by the majority of votes cast? (ii) Split the vote (where this is allowed) according to the proportions of the vote? (iii) Or respect the abstainers and only vote the respondents' holdings? The price signals generated by large active managers holding or not holding the stock may contribute to management change. For example, this is the case when a large active manager sells his position in a company, leading to (possibly) a decline in the stock price, but more importantly a loss of confidence by the markets in the management of the company, thus precipitating changes in the management team. Some institutions have been more vocal and active in pursuing such matters; for instance, some firms believe that there are investment advantages to accumulating substantial minority shareholdings (i.e. 10% or more) and putting pressure on management to implement significant changes in the business. In some cases, institutions with minority holdings work together to force management change. Perhaps more frequent is the sustained pressure that large institutions bring to bear on management teams through persuasive discourse and PR. On the other hand, some of the largest investment managers—such as BlackRock, Aladdin and Vanguard—advocate simply owning every company, reducing the incentive to influence management teams. A reason for this last strategy is that the investment manager prefers a closer, more open, and honest relationship with a company's management team than would exist if they exercised control; allowing them to make a better investment decision. The national context in which shareholder representation considerations are set is variable and important. The USA is a litigious society and shareholders use the law as a lever to pressure management teams. In Japan, it is traditional for shareholders to be below in the 'pecking order', which often allows management and labor to ignore the rights of the ultimate owners. Whereas US firms generally cater to shareholders, Japanese businesses generally exhibit a stakeholder mentality, in which they seek consensus amongst all interested parties (against a background of strong unions and labor legislation). ## Size of the global fund management industry 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. As of 2011 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. ## Philosophy, process, and people The 3-P's (Philosophy, Process, and People) are often used to describe the reasons why the manager can produce above-average results. Philosophy refers to the overarching beliefs of the investment organization. For example: (i) Does the manager buy growth or value shares, or a combination of the two (and why)? (ii) Do they believe in market timing (and on what evidence)? (iii) Do they rely on external research or do they employ a team of researchers? It is helpful if all of such fundamental beliefs are supported by proof-statements. Process refers to how the overall philosophy is implemented. For example: (i) Which universe of assets is explored before particular assets are chosen as suitable investments? (ii) How does the manager decide what to buy and when? (iii) How does the manager decide what to sell and when? (iv) Who takes the decisions and are they taken by committee? (v) What controls are in place to ensure that a rogue fund (one very different from others and from what is intended) cannot arise? People refer to the staff, especially the fund managers. Questions include who they are, how they are selected, how old they are, and how responsibilities are distributed within the team. This last question is vital because whatever performance record was presented at the outset of the relationship with the client may or may not relate to (have been produced by) a team that is still in place. If the team has changed greatly (high staff turnover or changes to the team), then arguably the performance record is completely unrelated to the existing team (of fund managers). ## Ethical principles Ethical or religious principles may be used to determine or guide the way in which money is invested. Christians tend to follow the Biblical scripture. Several religions follow Mosaic law which proscribed the charging of interest. The Quakers forbade involvement in the slave trade and so started the concept of ethical investment. ## Regulations Investment management globally is subject to various regulatory requirements aimed at protecting investors and ensuring ethical and professional conduct by investment management firms and professionals. Investment managers and firms are entrusted with the financial assets of clients and are obligated to act in the best interests of their clients, prioritizing the clients' interests ahead of their own. This involves seeking the best investment strategy based on due diligence in understanding the clients' goals, objectives, risk constraints, and needs, as well as providing full and fair disclosure of expected risks, benefits, fees, and conflicts of interest. ## United States In the United States, investment management is regulated primarily by the U.S. Securities and Exchange Commission (SEC), which develops and enforces rules governing investment advisers and related market participants. Under U.S. law, investment advisers with assets under management (AUM) exceeding $110 million generally register with the SEC, while advisers managing smaller amounts typically register with state regulatory authorities. Certain exemptions exist for specific categories of advisers, including those advising solely venture capital funds, family offices, or private funds with less than $150 million in assets under management. The regulatory framework for investment management in the United States includes disclosure requirements, professional conduct standards, and oversight by regulatory authorities. Two key statutes governing the industry are the Investment Advisers Act of 1940 and the Investment Company Act of 1940, which established federal regulation of investment advisers, investment companies, and related activities. ## United Kingdom In the United Kingdom, investment management is regulated primarily by the Financial Conduct Authority (FCA), which is responsible for authorizing and supervising investment managers and certain investment fund vehicles. Firms engaging in regulated activities, such as advising clients on investments, managing investments, or dealing in investments as an agent on behalf of clients, are generally required to obtain FCA authorization. The regulatory framework also covers areas including conduct of business, financial reporting, compliance, and complaints handling. Certain investment funds are additionally subject to oversight under the Alternative Investment Fund Managers Directive (AIFMD), which governs aspects of fund management and marketing within the European Union. ## Asian countries Regulatory frameworks for investment management vary across Asia, reflecting differences in national financial regulation systems. In Japan, aspects of financial markets and related services are supervised by the Financial Services Agency (FSA). The agency oversees a range of financial activities, including certain regulations related to cryptocurrency and payment services. Regulation of cryptocurrencies and related financial services varies across other Asian countries, with differing legal frameworks and regulatory approaches. In Southeast Asia, including member states of the Association of Southeast Asian Nations (ASEAN), economic integration and investment policies have been analyzed in relation to their potential to attract international investment and encourage policy coordination among countries in the region. ## Sources - Investment management · Wikipedia: https://en.wikipedia.org/?curid=1557851 Source: Wikipedia contributors — https://en.wikipedia.org/?curid=1557851&oldid=1377684823 Licence: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation notice: Reformatted for XPay; the source may be abridged, restructured or translated. Consult the cited revision for the original.