SIGNIFICANCE OF INVESTMENT MANAGEMENT COMPANIES
Investment Management is a systematic process of long term maintenance of asset. It is a company that links various clients who want to invest in the company in a long course of time. Invest management companies manage assets by pooling them together and help the asset holders to invest the same amount in various other fields which was not reachable by them before. Securities and Exchange Board of India defines Investment Management Company as a company formed and run under the Companies Act
The sponsor of the person who is responsible for the mutual fund can be appointed as the asset management company pursuant. The criteria for appointing a sponsor for the investment management company in India are reputation, the director appointing should be director in other AMC, the chairman should not be trustee in any other mutual funds; AMC should have a net worth not less than 50 cr.
Money is usually invested in a wide range of geographical areas. Shares of the company and government bond remain at the heart of investment; many firms express their capabilities by investing them in infrastructure which is more profitable. Asset management companies manages mutual funds, pension plans , hedge funds etc and this managements helps the clients to earn more on investments and receive commission in return .AMC charges specific amount of fee for managing or a percentage of the asset. For example, if an AMC is charging 2% commission fee on an asset of $4million it can own $80,000 of that investment. Majority of the AMC prefer commission to fixed fees.
Asset Management companies invests the assets of their clients in stocks, bonds, real estate, master limited partnership, private equity and more. Investments are managed according to certain mandate. Some Investment Management companies are Sharia compliant funds real estate VCF. These investment management companies provide services to reputed entrepreneurs to develop commercial, retail or residential properties in Kerala. They do Sharia auditing every three months and it does both disbursement and real estate investment in India.
The way in which asset management is carried out varies depending upon the organization. It depends on the size of the organization, complexity of asset, the risk appetite of the organization and its stake holders. As a whole asset management improves the stability of the organization