Are Asset Management and Investment Management the same?
Asset management and investment management are closely related but not entirely the same. They both involve the management of financial assets, but they differ in scope and focus.
Asset Management
Whilst ID Real Estate specialise in the asset management of real estate, asset management typically refers to the management of a variety of assets owned by individuals, institutions, or funds. These assets can include not only financial assets like stocks, bonds, and real estate but also tangible assets like real property, machinery, and equipment.
Asset management encompasses a broader range of activities beyond just financial investments. It involves strategic planning, acquisition, maintenance, and disposition of assets to maximise their value and achieve specific objectives, such as generating income, preserving capital, or achieving growth.
Asset management can be applied in various contexts, including personal wealth management, institutional asset management (e.g., pension funds, endowments), and corporate asset management (e.g. managing a company's physical and financial assets).
Investment Management
Investment management specifically focuses on the management of financial assets with the goal of achieving investment objectives, such as maximising returns, managing risk, or achieving specific benchmarks (e.g. beating the market index).
Investment management primarily deals with financial instruments like stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other securities but also includes the financial management of real estate.
Within real estate investment management tends to focus on the assets at a portfolio level and focuses on maximising the returns, managing the inherent risk of owning real estate and beating benchmarks like MSCI.
Investment managers like ID Real Estate analyse micro and macro market conditions, assess risks such as MEES regulations and obsolescence whilst looking for opportunitiesto generate favorable returns for our clients or investors, when building investment portfolios for our clients and investors.
Summary
In summary, while both asset management and investment management involve managing financial assets, asset management has a broader scope, encompassing the management of both financial and non-financial assets, whereas investment management specifically focuses on the management of the financial aspect of investments to achieve specific financial goals.
At ID Real Estate our Investment Management focuses on achieving financial returns, this often means (especially with value-add assets) that we need to engage in active asset management as part of our investment management process. This allows us to maximise value through rental growth, risk mitigation, futureproofing the financial aspect of the assets and enhancing value.
For further information and to find out how ID Real Estate can help you invest in real estate in the UK get in contact with our head of Investment Jonathan Brown, jonathan@idrealestate.co.uk.