What does asset management mean and how does it differ from investment management?
Are all investments considered to be assets? Is there a difference. I want to know how to start thinking about money and investments. #finance #financial-services #investment-management #investing
4 answers
Christopher ’s Answer
They are basically two different terms for the same thing. They are used interchangeably. They are broad terms for investing in various asset classes such as equities (stocks), fixed income (bonds), commodities, real estate, etc.
Rose’s Answer
In my line of work, "assets" are property, plant, and equipment, while "investments" are assumed to be financial instruments. There is a lot of overlap with these terms. We make investments in PP&E, and financial instruments are in the Assets portion of the balance sheet.
Asset Management is the tracking and depreciation of PP&E.
Chuck Jones
Chuck’s Answer
Hillary’s Answer
An asset manager in the real estate context is somewhat different from other asset classes like stocks, bonds, etc. While you need to be able to run the numbers and analyze how and why the property is making money/not making money, you also need to have knowledge about the commercial real estate market where the property is located, and what the trends/market dynamics are, as that also impacts your ability to manage the project successfully. You also need to be familiar with what terms are typical in sale or lease agreements in that market and for the type of property you are managing. It calls for a specialized skill set.
Hillary says it well. All investments are "assets" A financial analyst is mostly for investments related to stocks, etc The "asset manager" term frequently means real estate/physical assets. The asset manager ensures the physical and financial health of the asset. They improve the value of the asset and make physical/financial recommendations/approvals on behalf of the investors. They also assist the investment leader/general partner by evaluating a potential purchase and monitoring it's performance, investor communications & distributions. The AM is an oversight to connect the property management team and the investors. It's multi-faceted, requiring knowledge of financial analysis, construction, leadership and good client skills.
Meade Bishop