Asset Management: All You Need to Know

Depending on their nature, assets can either be physical or intangible. No matter if the asset is tangible or not, the holder’s main concern and interest are how to increase its value. Therefore, asset management plays a role in this. Asset management is the process of ensuring that the value of a certain asset rises as a result of various financial metrics and decisions.

We will look at the definition of asset management, its types, its significance, how it differs from wealth management, and the well-known asset management firms in Nigeria as part of our discussion in this post.

Also, check out All You Need to Know about Business Plans.

What is Asset Management?

The process of managing a company’s or an individual’s assets vestment and accomplishing particular financial goals is known as asset management. Managing investments, properties, and other tangible assets is an example of this.

These services are offered to clients by asset management companies and financial advisors, assisting them in managing risk and making educated investment decisions.

Importance of Asset Management 

Why does an individual or an organization need asset management? The answer to this question portrays the importance of the act of seeking assessment management. We will discuss some of the importance here to help you get a view of why it is important to engage in asset management. 

Improve Financial Productivity 

It shows that an organization or individual is financially prudent when one practices management. Making this decision pays off in both the short and long run when it comes to improving financial productivity. Asset management makes it possible to monitor the overall assets such that the efficiency and the output from them are profitable. 

Proper and Efficient Tracking 

With asset management, there is effective and proper tracking of the assets and the resources attached to ensure that there is no under-utilization of the resources and mismanagement of the assets.  with asset management that makes this possible. As an advantage, some of these measures involve the use of technological software to track and cull relevant data and statistics to manage assets. 

Encourages proper bookkeeping 

Bookkeeping becomes effective when asset management is involved. With asset management, the accumulation of ghost assets becomes harder to record in the inventory and financial books of the company. Hence, bookkeeping gives the right records of the actual values and conditions of the assets, preventing theft and mismanagement of the assets. 

Identifying Potential Risks 

One of the essentials why asset management is beneficial is the identification of the potential risks that can befall the assets and reduce their performance of the assets. Identifying the risks makes it possible to draw up possible and optimal solutions to best eliminate such risks. 

Asset Management Companies in Nigeria 

Several asset management companies in Nigeria offer a variety of services such as portfolio management, investment advisory services, and research analysis. Some of the well-known asset management companies in Nigeria include:

1. Stanbic IBTC Asset Management: This company offers a range of investment products and services including mutual funds, pension funds, and portfolio management services.
2. FBN Quest Asset Management: This company offers a wide range of investment products including mutual funds, structured products, and portfolio management services.
3. United Capital Asset Management: This company offers a range of investment products and services including mutual funds, pension funds, and portfolio management services.
4. ARM Investment Managers: This company is one of the leading asset management companies in Nigeria and offers a wide range of investment products and services.
5. Vetiva Fund Managers: This company offers a range of investment products and services including mutual funds, pension funds, and portfolio management services.
6. Asset & Resource Management Company: This company offers a wide range of investment products and services including mutual funds, structured products, and portfolio management services.
7. African Alliance Asset Management: This company offers a range of investment products and services including mutual funds, pension funds, and portfolio management services.

Also, check out All You Need to Know about Exchange Rates.

How to select a good asset management company

Here are some tips to take note of if you want to check out asset management companies to determine the best one to put your assets in their care.

Investment strategy

Recognize the firm’s investment philosophies and tactics, and make sure they line up with your financial objectives and risk appetite.

Track Record

Examine the company’s historical performance, including returns and risk-adjusted returns, to get a sense of its track record. Don’t forget to take into account the company’s performance in various market environments.

Fees

Be aware of and contrast the fees charged for the company’s investment products with those charged by other asset management companies.

Reputation

Examine the company’s reputation, taking into account any disciplinary actions or any unfavorable press. To gain their opinion on the company, it’s a good idea to talk to other clientele or financial experts.

Services

Consider the services offered by the company, such as financial planning, tax planning, and estate planning. Make sure the company can meet all your financial needs

Regulation

Check the company’s regulatory compliance and registration status. This is important to ensure your investment is safe and protected by the authorities

Types of Asset Management 

Traditional asset management 

For the benefit of their clients, this sort of asset management manages assets in stocks, bonds, and other securities, generally through mutual funds or other investment vehicles.

Real estate asset management 

Managing real estate assets including residential complexes, commercial buildings, and shopping malls are a part of this form of asset management.

Private equity and venture capital asset management 

Managing investments in private businesses is a component of this asset management strategy, which is frequently done through venture capital or private equity funds.

Infrastructure asset management 

This type of asset management involves managing investments in infrastructure projects, such as roads, bridges, and power plants.

Hedge fund asset management 

This type of asset management involves managing investments in hedge funds, which use a variety of investment strategies to generate returns.

Alternative asset management 

In this sort of asset management, assets other than stocks, bonds, and cash are managed. Commodities, money, and tangible assets, such as currencies, real assets (e.g. real estate, infrastructure), or derivatives.

Asset Management VS Wealth Management 

Asset management is the term used to describe the expert management of many sorts of assets, including stocks, bonds, real estate, and other investments, on behalf of clients. Growing and maintaining the value of the assets under management is the aim of asset management.

Contrarily, the term “wealth management” refers to a wider range of services that high-net-worth individuals can use to manage and increase their wealth.

These services include financial planning, tax planning, estate planning, and asset management. A team of advisors from wealth management businesses frequently works together to offer clients a full range of services.

Final Notes on Asset Management

Asset management is a good measure to secure the value and increase the value of your assets as well. The post helps you understand the benefits of asset management and other information about asset management.

Before you go, check out How to Get Grants for Small Businesses in Nigeria.