Investment management is a branch of financial management that involves the collective management of different financial assets of a company. This branch also involves analyzing market data and making recommendations about when, where, how, and what to invest in so that the company can earn a return on these investments. The main objective of an investment manager is to earn a high return on investment, especially by buying and selling financial instruments such as stocks, derivatives, and bonds. Other objectives of investment management are the allocation of capital assets, risk management, liquidity management, and asset allocation among other areas.
The scope of investment management services is global and the range of services offered may vary from firm to firm. It may include bond and mortgage offerings, equities, and derivatives, among others. Some companies offer a complete portfolio management service, which involves the identification, assessment, and allocation of the funds in corporate accounts, public and corporate bonds, government and municipal securities, private placements, as well as a number of alternative investments.
As per the International Financial Stability Report 2021, ‘investment management refers to the planning, organization, and execution of financial strategies to ensure the long term viability of a particular organization’. In this regard, financial goals and objectives should be determined and implemented before any of these assets are invested in order to achieve these goals. Investment managers are typically employed by large corporations as well as investment banks and other financial institutions for this purpose. They are usually involved in the process of analyzing information about the company’s assets, as well as analyzing and evaluating potential risks associated with these assets. Therefore, an investment management service is required not only for long-term growth of the company, but also to ensure that the company’s short and medium term goals are achieved.