Asset managers control more than $100 trillion of financial assets globally. Since the 2008 financial crisis, the industry has come under increasing scrutiny but still remains poorly understood and investment scandals continue to headline in the financial press. Most literature on fund managers concerns how they invest or offers tips on how others can invest, but the way these businesses make money and how they pay their star investors is barely explored. This book examines how the fund management business works and casts a critical eye over the way asset managers operate and make money. It offers a different perspective from technical textbooks on fund management and instead provides insights into the reality of commercial decisions taken by fund managers and their companies.
Beyond describing asset managers’ organizational model – covering investment, distribution and operations – the book explores how some firms have become money-making machines, the nature of their client relationships, the ways firms generate revenues and the cost pressures many are facing. The impact of regulations in shaping the industry is shown to play an important role, for example, in drawing a distinction between hedge funds and mutual funds. Within this, the role of star investors, company culture, and the challenge of sustainable investing are also considered to show how the industry is evolving – and the areas where it is struggling to change.
Suitable for students of business and finance, those working in allied areas of the finance sector, and for anyone with a general interest in how financial institutions and markets operate, the book offers readers a balanced and considered guide to the economics of the fund management industry and a critical appraisal of the sector's future.
1. Introduction 2. Organization 3. Business model 4. Managing money 5. Stars and scandals 6. Purpose and sustainability 7. Regulations and responsibilities 8. Sales and products 9. Fees and charging 10. Conclusions and the future
Ed Moisson is a journalist for the Financial Times group and has reported on the fund management industry for many years.