Is Asset Management Worth it?
At ID Real Estate we often get asked is asset management really worth the fees involved and the answer is never a straight forward yes or no, it depends on various factors, including individual circumstances, financial goals, investment knowledge, and preferences. Here are some considerations to help evaluate the value of asset management:
Expertise and Experience: Professional asset managers like oursevles often have extensive knowledge and experience in financial markets, investment strategies, and portfolio management techniques. They can help investors and landlords navigate complex financial environments, make informed investment decisions, and potentially achieve better risk-adjusted returns compared to individual investors.
Time and Effort: Managing investments effectively requires time, effort, and ongoing monitoring. For individuals who lack the expertise, time, or interest to actively manage their investments, outsourcing this responsibility to a professional asset manager can be beneficial. It frees up time for other pursuits and ensures that investments are managed efficiently and effectively.
Diversification and Risk Management: Investment and asset managers, like ID Real Estate, typically construct well-diversified investment portfolios tailored to our clients' risk tolerance, investment objectives, and time horizons. Diversification can help mitigate risk by spreading investments across different asset classes, sectors, and geographic regions, however more recently we have found specialised portfolios such as Multi-let Industrial, Build-To-Rent, or City Centre Offices have allowed asset managers to provide strong returns. Asset managers monitor portfolios regularly and adjust allocations as needed to adapt to changing market conditions.
Access to Investment Opportunities: Asset managers may provide access to a broader range of investment opportunities, including alternative investments, private markets, and specialised strategies that may not be easily accessible to individual investors. This access can potentially enhance portfolio diversification and returns.
Costs and Fees: It's essential to consider the costs associated with asset management, including management fees, advisory fees, and other expenses. These fees can vary depending on the type of services provided and the size of the investment portfolio. Investors should assess whether the potential benefits of professional management justify the costs incurred. At ID Real Estate all our fees and costs are highlighted up front so that you can make an educated decision on whether asset management works for you.
Performance and Track Record: Evaluating the historical performance and track record of asset managers can provide insights into their ability to generate returns and add value relative to benchmarks and peers. However, past performance is not a guarantee of future results, so it's essential to consider other factors as well.
Ultimately, the value of asset management is subjective and varies from person to person. Some individuals may prefer to manage their investments independently, while others may find value in delegating this responsibility to professionals. It's essential to carefully weigh the potential benefits, costs, and trade-offs before deciding whether asset management is worth it for your specific situation.
If investment or asset management is something you are considering please get in touch with Jonathan jonathan@idrealestate.co.uk or Ian Ian@idrealestate.co.uk to discuss your requirements. We specialise in the full management of assets from acquisition through to disposal and can slot in at any stage to suit you and your current or future needs.