Risk Books A Guide to Fund Management

The fund management industry performs the professional management and administration of investment assets on behalf of its clients. The terms fund or asset management are used to refer to the management of all forms of institutional investment, as well as the collective management of the wealth of private individuals. As a result, it is a large and important financial industry segment. In 2010, the industry had some US$62 trillion of assets under management, generating fee revenue of over US$500bn. In order to capture the revenue opportunity senior officers in fund management companies have to apply best practice and understand operational issues. This is not as easy as it sounds. They have numerous calls on their time and their core focus should always be investment performance. It was to address the resultant time optimisation dilemma that this guide was compiled. This book gathers together accepted industry best practice, structure, operations and procedures. As a result, readers can spend less time rummaging through industry white papers and more time on the strategic direction of the firm. The guide is up to date, which is something that immediately makes it more relevant than the multitude of papers and operational notes that senior management is confronted with. It aims to offer one stop shopping on how to run a firm, addressing such issues as: 1. The different approaches to fund management 2. Revenue models 3. Complex regulation 4. Legal structures 5. Best practices and how to implement them 6. Performance generation and persistence 7. Clear and concise operational descriptions and functions. 8. How to make the firm client centric 9. Product development 10. The threat and opportunities from alternatives to mainstream asset management In addressing these issues, this guide should assist directors, executive committee, finance committee, investment committee, asset managers, and consultants in effectively managing, monitoring, and evaluating the operations of a fund manager. The guide is written in plain English, which should prove refreshing to those daunted by the regulatory overlay. In that way it should also help senior officers ensure compliance with fiduciary and prudent investor responsibilities. The guide can also be used as an educational tool. The following pages set forth typical structures used by fund management firms to build their business. It is written in a way that will help senior management maintain the consistency of the investment processes, something which is necessary to produce good long-term performance and hence success.