The asset management challenge

Markus Aakko

The asset management industry performs an important function in facilitating investment between asset owners and the capital markets. The role of the asset management industry is to provide a service by selecting the most attractive investment opportunities from the entire investment universe on behalf of investors, and provide vehicles, such as funds, to facilitate these investments. From a portfolio construction perspective, most asset owners use these vehicles as their building blocks – in other words, rather than purchasing individual securities and weighing the relative merits of one security against another, asset owners tend to select investment managers and their products to build their overall investment portfolios.

Asset owners represent the demand side for investment management products and services due to needs arising from their portfolio construction process. This analysis would be incomplete without an understanding of the challenges of the supply side, looking at the asset management industry from a business perspective. Client needs evolve over time, and products and services provided by investment managers need to evolve in lockstep with demand. However, to

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