What is Asset Management
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Using Business School to Change Careers
Going to business school is often seen as a great way to ramp up your current career. People take on more responsibilities, then decide to pursue an MBA so they’ll be ready for big opportunities within their company or industry.
But an MBA can also be a great tool for changing careers. Going to business school can help you hit the reset button on your career path, distilling the universal aspects of your previous work experience and combining them with management strategies and exposure to new industries.
Our previous articles in the How to Switch Careers with an MBA series looked at using an MBA to move into the investment banking field.
Over the next few weeks, we’ll be looking at how to use an MBA to switch careers to asset management. Let’s get started.
What is Asset Management?
Asset management companies work with clients, whether individuals, charities, or organizations, who have a large pool of available funds that need to be invested and actively managed. Some examples of these are pension funds, charitable endowments, or large private investments.
Asset management companies provide their clients with access to securities and products that are not generally available to the average retail investor.
These funds can be invested in a variety of different assets and securities: equities, debt, real estate, exchange traded funds (ETFs), and more. The funds can be private or publicly traded, with daily market prices based on the value of the underlying assets.
In addition, professional asset managers are experts in selecting investments that align with a fund’s investment objectives and risk tolerances. They manage the funds to achieve the maximum return for their clients.
Other elements under the Asset Management banner include mutual funds, hedge funds, REITs, and pension funds. In the UK, this also includes unit trusts.
How Asset Management companies work
Asset management companies are tasked with investing clients’ money into assets that will generate a positive return. They do this by carefully analyzing and selecting investments that will appreciate in value over time, in turn resulting in an increase in the value of the fund.
For some hedge funds who are allowed to hold short positions, they will be able to buy and sell short assets to achieve this return on their fund.
Asset managers make their money by charging a service fee for clients that buy into their fund. There is usually an initial charge and a yearly management charge, which is calculated as a percentage of funds under management.
Hedge funds operate on a slightly different basis. Besides charging a yearly management fee, they also levy a charge on the increase in the valuation of the fund too. The percentage they charge varies from fund to fund, and can be anywhere from 5% to 20% of the net increase in value.
There are many different types of funds available to investors. Some funds are for institutional investors only, and some are “retail funds” that allow individual investors to participate. All the funds have different investment objectives, and they can manage a whole host of different assets.
The most commonly known are equity funds like the famous Berkshire Hathaway, managed by the legendary Warren Buffett. Other asset management products are pension funds.
In line with the growth of the industry as a whole, the greatest number of available asset management roles over the next several years will likely be found in larger global asset management groups, as opposed to smaller boutique fund managers.
Top 10 Asset Management Firms in the US, ranked by assets under management
Top 10 Asset Management Firms in the UK, ranked by assets under management
Can an MBA Help You Get a Career in Asset Management?
Are you interested in switching to a career in asset management?
Large global asset managers look for top talent to join their ranks. An MBA is a great way to get your foot in the door. Our next article in this series will look at what kinds of roles you can look for in asset management.
Graduating from a prestigious business school will get you on the fast track to success, and the best way to get there is with a free MBA application assessment from EXPARTUS. We’ll help you develop a comprehensive plan to showcase the strengths of your personal brand, so you can make a strong case for admission.
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