ASSET MANAGEMENT

COMPANIES
NAME – AAYUSHI.PATEL
ROLL NO- 30
CLASS - TYBFM
INTRODUCTION
 An asset management company (AMC) is a firm that invests
pooled funds from clients, putting the capital to work through
different investments including stocks, bonds, real estate, master
limited partnerships, and more. Along with high-net-worth
individual portfolios, AMCs manage hedge funds and pension
plans, and—to better serve smaller investors—create pooled
structures such as mutual funds, index funds, or exchange-
traded funds, which they can manage in a single centralized
portfolio.
 Asset management companies are colloquially referred to as
money managers or money management firms. Those that offer
public mutual funds or exchange-traded funds (ETFs) are also
known as investment companies or mutual fund companies.
Such businesses include Vanguard Group, Fidelity Investments,
T. Rowe Price, and many others.
HOW TO CHOOSE AMC ?
 Every AMC follows the investment objective of the schemes before investing and
you must check on the track record and performance history of the investment
schemes in the past during the ups and downs of the market.
 It is very important to know your AMC well before you invest your hard-earned
money.
 While selecting a fund house ensure that the below parameters met.
 a. The reputation of an AMC- Reputation is built by consistency in performance
over a few years say 5 years or 10 years. The investor must go through the
performance through annual reports of schemes and AMC, reviews prevalent in
the market and compliance report to SEBI, AMFI, and RBI.
 b. Fund Manager’s credibility- AMC work in parallel to its fund manager.
Hence, an investor must look for past performance of the fund manager
managing the assets and funds.
 c .Price and Value- Before selecting any fund, an investor must consider looking
at the price of the fund and the value creation and return that the fund offer.
 d .Fees and commission- Few AMCs charges a fixed fee for their services while
others charge a commission on the return earned on the fund.
HOW AMC WORKS ?
 An asset management company serving as an advisor to a client
has one overriding goal -- to substantially grow its client's
portfolio. Asset managers are often hired by institutional investors
like pension funds, corporations, and financial intermediaries, as
well as high net worth individuals.
 Asset managers conduct research, interviews, and statistical
analyses of companies, markets, and trends in order to determine
what investments to make or avoid on behalf of their clients. Asset
managers do not generally need "asset manager" licenses, though
the firms that hire these managers often require registration with
one or more exchanges and/or the National Association of
Securities Dealers (NASD).
HOW DOES AMC MANAGE FUNDS ?
 When you invest with an AMC, you purchase a
portfolio they offer. The company is principally
responsible for driving the mutual fund and
making decisions that benefit the investors. The
process is broadly listed below.
 Asset Allocation

 Research and analysis

 Portfolio construction

 Performance Review
BODIES GOVERNING AMC
 AMC performs under the supervision of the board of trustees.
All the Asset Management Companies are governed by SEBI
and AMFI.
 Securities and Exchange Board of India (SEBI) is the Indian
Capital Market Regulator which governs and controls every
AMC in India.
 The Association of Mutual Funds in India (AMFI) is a
statutory body formed by mutual fund companies. AMFI was
formed with the vision of a transparent and ethic driven
financial industry. Every AMC must comply with the
regulations led by AMFI.
 Banks being sponsors are governed by RBI as well along with
SEBI and AMFI.
 Lastly, all the regulatory bodies SEBI, AMFI, and RBI are
governed by RBI.
FUNCTIONS OF AMC
 Portfoliomanagement
 Advisory services

 Exercise due diligence

 Quarterly reports

 Arrangement of approval
BENEFITS OF ASSET MANAGEMENT
COMPANY
 Good Business Practice. Asset management results in better
decisions. Aligning management of infrastructure with strategic
policies and direction will support the long-term success of the utility’s
mission, goals and objectives.
 Helps identify and manage risks:-Asset management encompasses
the identification and management of risks that arise from the
utilization and ownership of certain assets. It means that a firm will
always be prepared to counter any risk that comes its way.
 Helps guarantee the accuracy of amortization rates:-Since
assets are checked on a regular basis, the process of asset
management ensures that the financial statements associated with
them are kept updated.
LIMITATIONS OF ASSET
MANAGEMENT COMPANY
 May arise conflict of interest
 Higher minimum investment

 Risk of criminal liabilities

TOP ASSET MANAGEMENT
COMPANIES IN INDIA
 ICICI PRUDENTIAL MUTUAL FUND-With the AUM size of
approximately ₹ 3 lakh crore, ICICI Prudential Asset Management
Company Ltd. is the largest asset management company (AMC) in
the country.
 HDFC Mutual Fund- It is at the 2nd number by the size of AUM.
With fund size of nearly ₹ 3 lakh crore, it is one of the largest mutual
fund companies or AMC in the country.HDFC Asset Management
Company (AMC) was incorporated in 1999. It was approved to act
as AMC for HDFC Mutual Fund in 2000.
 ADITYA BIRLA SUN LIFE MUTUAL FUND-Formerly known as
Birla Sun Life Asset Management Company, this fund house is the
3rd largest in terms of the AUM size. Presently it is known as Aditya
Birla Sun Life (ABSL) Asset Management Company Ltd. It is a joint
venture between the Aditya Birla Group in India and Sun Life
Financial Inc of Canada. It was set up as a joint venture in 1994.
RECENT CHANGES IN ASSET
MANAGEMENT COMPANIES IN
INDIA
AXIS AMC Invest Rs.65 Cr In Affordable
residential project in Bangalore.
 Axis AMC Ltd invested Rs.65 cr in housing
project to be built by Adarsh Developers in
Bangalore.
 The construction will be spread across two
phases with 600 plus units in ticket sizes from
Rs. 30 lakh to 47 lakh.
 The fund had earlier invested Rs.60 cr in
Akshaya developers project in Chennai.
 It is joint venture between AXIS AMC &
Schroders Investment management.
CONCLUSION
 Asset management companies manage huge
amounts of money gathered from investors
through multiple schemes and help invest in
equity, mutual funds, real estate, etc. with the
intent of providing a good return on investment
to its investors. Investors thus, place their trust
in the company and the fund manager who will
be handling their hard-earned money. A large
AUM can be both positive, as well as negative. If
invested efficiently, it can deliver manifold
returns for its investors.