It is important to be aware of types of asset management for effective wealth management, higher returns, and minimum risk involved. Asset management is a crucial process in managing the investment of major financial products (assets) such as mutual funds, pensions, portfolios, real estate, and more.
Numerous asset management companies have emerged in the last few years, offering efficient diversification and return on investment. In this article, let us know the major types of asset management and their importance.
What is Asset Management?
Asset management is defined as identifying, acquiring, and managing assets of clients and maximizing their returns. There are many types of assets, such as tangible and intangible. Some assets can be touched, while others cannot. It is important to manage asset investments to achieve growth over the years.
Asset management helps enterprises diversify their investments based on various asset classes and achieve higher returns on investment. Enterprises hire many asset management companies to manage their assets and make informed investment decisions on their behalf.
Key Takeaways
- Asset management is the process of finding the right asset to invest for good returns.
- It is finding, acquiring, managing, and diversifying assets with efficient strategies and minimal risk to get a good return on investment.
- The major types of asset management are investment management, real estate asset management, wealth management, digital asset management, fixed asset management, and more.
Types of Asset Management
Based on services and asset class there are some major types of asset management, let us know about them in detail.
1. Investment Management
This includes managing investments in securities like bonds, stocks, equities, hedge funds, mutual funds, and more. The major objective is to manage the strategic allocation of assets for investment and meet business financial goals.
Diversification is important in investment management hence divide your investment across various asset classes to get higher returns. Investment management decisions are taken by finance experts who are well aware of current economic conditions and market trends.
2. Real Estate Asset Management
Real estate is one of the most favourable and high-yielding asset investments involving buying, selling, and leasing properties. The major focus is to maximize the return value of the real estate assets.
Various asset management companies help enterprises choose the best commodities and infrastructure after analysing various factors like location, connectivity, price, marketplace, etc.
3. Wealth Asset Management
High net worth clients have generational wealth, gold, and other assets that they want to grow to manage their liability and pass to the other generation. It is important to make informative investment decisions based on financial planning, tax planning, estate planning, retirement planning, and more.
4. Infrastructure Asset Management
Managing road networks, sewer systems, railway networks, water supply, electricity supply systems, and other communication systems come under infrastructure asset management. It also focuses on achieving maximum return on infrastructure asset investment, optimizing total costs of ownership, and others aiming to provide more sustained and accessible public infrastructures for the people.
5. Digital Asset Management
This investment management focuses on digital assets like files, folders, social media, presentations, websites, etc. The main objective is to store, organize, and protect the information stored in digital assets. It comes in all shapes and sizes based on the need of organization for sharing and storing documents with internal teams and more.
6. Fixed Asset Management
Fixed asset management is a process of recording, managing, and monitoring major fixed assets for budgeting, forecasting, and asset depreciation calculations. It is important to maintain accurate records to comply with accounting standards and principles.
7. Public Asset Management
Public asset management focuses on managing assets under government, such as parks, offices, public buildings, and infrastructure. The major objective of public asset management is to ensure that these assets provide value to the public and are of use to them. It is our duty as well to take care of the public asset management in our areas.
8. Enterprise Asset Management
It is also known as EAM and is used to manage and maintain an organization’s physical assets, such as asset maintenance, work management, supply chain management, planning and scheduling, and more throughout the entire asset lifecycle.
EAM software provides control and management of assets and equipment. The main objective is to optimize the utilization of assets and reduce operational costs.
9. IT Asset Management
IT Asset management is the process of managing organizational assets involved in IT to ensure maximum return on investment. IT Asset management is a set of practices to help businesses make informative business decisions with the help of advanced tools and technologies. They also need to manage their IT assets and ensure effective utilization as needed.
10. Private Asset Management
This asset management service mainly focuses on high-net-worth clients and families to provide them with personalized investment services. They generally provide all types of financial and investment services, such as fund planning, tax regulations, investment strategies, wealth management, and more.
Why does your company need asset management?
Asset management is important for every organization as it helps keep track of assets and make sure that they are being handled efficiently. Without asset management tracking and managing assets would be very difficult. It is important to save and promote effective resource utilization.
It helps businesses prevent disputes over assets and is very important when in a shared business, equipment, or space. It minimizes the risk involved in investment decisions and wealth management. The main objective of asset management is to help you grow your assets through effective strategies and planning.
Asset management companies help manage all important financial decisions and ensure compilation and regulatory checks. They also ensure that your assets are safe and do not lose their value.
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Types of Asset Management FAQs
Q1. What is Asset management?
Ans: Asset Management is defined as identifying, acquiring, and managing assets of clients and maximizing their returns. There are many types of assets, such as tangible and intangible.
Q2. What are the major types of asset management?
Ans: Investment management, digital asset management, real estate management, wealth asset management, fixed asset management, and more.
Q3. What are the three types of asset management?
Ans: The three asset management types are equities. bonds, cash equivalent. These are more commonly referred to as stocks, bonds, and cash. Investors must properly plan to diversify their investments to strengthen their portfolios.
