INVESTMENT MANAGEMENT

Investment management is the management professionals who manage a variety of securities or securities such as stocks, bonds and other assets such as property with a view to achieving a favorable investment target for investors. Investors may be institutions (insurance companies, pension funds, companies etc) or may also be the individual investors, where the medium used is usually in the form of investment contract or a contract is generally used is a form of collective investment (KIK), such as mutual funds.

Scope of investment management services include financial analysis, asset selection, stock selection, implementation planning and monitoring of investments.

Outside the financial industry, the terminology "refers to the investment management of other investments other than financial investment in such projects, brands, patents and many others other than stocks and bonds.

Investment management is a huge global industry and plays an important role in the management of trillions of dollars, euros, pounds and yen.

Investment management industry
The operations of these investment management consists of various areas, including hiring professional investment managers, research and trading functions order (dealing), the completion of the transaction, marketing, internal audit, and preparing reports for clients.

Management of the investment management industry involve very many parties that show how the complex needs of this industry. In addition to marketing employees who bring clients to come to this industry, there is the compliance staff (to ensure compliance with all applicable regulations by the company), internal auditors (internal system for auditing and internal oversight), the department of finance (to record its financial transactions) , computer experts and other support staff (to record every transaction and financial valuation of thousands of corporate customers)

Role as an agent
Investment management firms often act as an agent or broker of their shareholders and the company rather than directly owns shares of the company. Theoretically, the owners of the shares have enormous power to change the direction of its corporate policy through the voting rights of shareholders in general meeting (AGM) and its ability to control and reduce corporate management. However, in practice, the owners of these shares does not use voting rights which are owned collectively (because the ownership of each consists of only small amounts), and financial institutions (as agents) sometimes using the voting rights. Has become a common belief that investment management as an agent must have the ability to actively monitor the performance of companies whose shares are owned by their customers.

Operational Constraints
Some constraints in the investment management business operates, among others:
gross income derived directly related to the valuation of market value so that the fall in market value of assets will result in a drastic decrease in gross profit relative to the cost.

difficulty of maintaining the performance of investment management so as to achieve an above-average value and the customer usually indicates lack of patience when bad investment performance.

salary of a successful investment manager is very expensive and has the possibility of hijacked by a competitor.

investment performance is above average is highly dependent on the uniqueness of the expertise of investment managers, but the customer never care about such things and simply just look at the success of companies that are considered based on the philosophy and internal discipline

analysts who have the ability to generate above-average profits often have an established financial condition so that they will refuse offers of employment offered by the company to manage its own portfolio.

Investment companies in the world who might be most successful are those who separate from the banking and insurance, both physically and psychologically, where the best performance and dynamic business strategy that is most commonly produced by an independent investment management firm.

Funds managed by global investment management
Global investment management industry assets increased rapidly and in 2006 reached a record 55 trillion dollars, an increase of 10% from the previous year and increased by 55% if calculated since 2002.

Total pension fund assets reach 20.6 trillion dollars in the year 2005 in which 16.6 trillion invested in insurance and 17.8 trillion in mutual funds. Merrill Lynch assess the value of individual investments reached 33.3 trillion, which placed third in other forms of conventional investment management.

In 2005, 48% of total global investment funds come from the USA and Japan is the next position with the amount of 11% and England by 7%. Asia-Pacific region showed strong growth in recent years. Countries such as China and India offer huge potential and many companies are increasing their attention on this region.

10 large investment management firm
Top 10 asset managers in the year 2005 according to Global Investor Magazine based on assets under management. (Source: BGI)
Companies ranked in kelolannya Funds


(U.S. $ million) Country 1. Barclays Global Investors 1,400,491 UK 2. State Street Global Advisors 1,367,269 U.S. 3. U.S. 1,299,400 4 Fidelity Investments. Capital Group Companies 1,050,435 U.S. 5. Legg Mason U.S. 891.400 6. The Vanguard Group 852 000 U.S. 7. Allianz Global Investors Germany 790.513 8. JPMorgan Asset Management U.S. 782.646 9. Mellon Financial Corporation 738.294 U.S. 10. Deutsche Asset Management Germany 723.366

Pensions & Investments magazine put UBS in the first rank, with more than two trillion dollars of funds under management

Structure portolio
Business focuses on investment management industry is the manager on duty to invest and divest client investments. Investment advisors from a certified investment management company should manage its clients investments in accordance with the needs and risk profile of each customer, whereby financial advisers will recommend an appropriate form of investment for these customers.

Asset allocation
Various asset classes include bonds, property, derivatives and commodities, where the investment manager paid placement services to carry out investments in various asset this. Various asset classes has a market dynamics vary and influence each other, so the placement of investment funds in various asset is able to bring significant influence on investment performance.

Long-term Investments
It is important to consider the evidence yields on long-term performance of assets in different investment and to make investments in that period in order to get the best investment results. For example in a long period of time (eg above 10 years) in some countries, stocks produce higher returns than bonds, and bonds lebihy give higher returns than holding cash. According to financial theory this is caused by a greater risk on the stock (more volatile) than bonds are more risky than cash.

Diversification
Fund managers to pay attention to the background of the asset allocation, will consider diversifying the risk profile of assets based on its customers and make a list of suitable investment placement planning. The list will show the percentage of placement of funds in each stock or bond. The theory of portfolio diversification was introduced by Harry Max Markowitz and effectiveness of diversification requires management of the correlation between returns and capital returns, issues internal to the relevant portfolio, cross correlation between the rate of return.

Methods investment approach
Many different methods of how to approach the investment management that can be done by an investment management company, such as growth (growth), value (value fund), market neutral, small capitalization, the index and others. These different methods each have features, adherents, certain financial environment, the nature of the specific risks vary.