Asset Management
This sector consists of firms that pool capital from institutional and retail clients to invest in diversified portfolios of stocks, bonds, and real estate to generate returns.
Why it exists
Asset management exists to pool capital and deploy it across public and private markets on behalf of individuals and institutions.
Why it’s necessary
Most investors lack the time, scale, or expertise to directly manage diversified portfolios. Asset managers transform savings into productive capital across the economy.
Key components
Investment strategies (equity, fixed income, alternatives)
Portfolio managers & analysts
Distribution channels (advisors, platforms, institutions)
Custody, reporting, and compliance infrastructure
How to evaluate businesses
Assets under management (AUM), net inflows/outflows, fee rates, operating margins, and product mix define value. Businesses with sticky institutional capital, alternatives exposure, and strong long-term performance have structurally better economics.
How the industry could be improved
Outcome-based fees, greater transparency around true risk, better portfolio personalization at scale, and tighter integration between financial planning and investment execution.