All You Need to Know About Asset Management in CRE

By Published On: November 19, 20212.1 min read

Asset management in real estate means relying on investment advisors for your portfolio. If you want a hands-off yet safe approach to real estate investing, an asset manager may be your best bet.

What Is Asset Management?

Asset management refers to the direction or management of some or all of your financial services portfolio, either with an institution, investment bank or individual. When you have an advisor, you have assets under management (AUM).

If you work with a financial institution or investment bank, you’ll enjoy investment services and products that many independent investors might not have access to.

You’ll find there are two goals with asset management: to raise the value of your assets over time, otherwise known as appreciation, and to minimize risk while doing so. Since there are typically minimum investment amounts, asset management is usually accessible only to high net worth individuals, governments, financial intermediaries and corporations.

Your Asset Manager’s Role

Your asset manager will assess and decide on the best investments to make or not make on your behalf to grow your portfolio. Most of these investment products consist of fixed income, equity, commodities, real estate, real estate investment trusts (REITs) and mutual funds. Asset managers achieve this with detailed research, using micro and macro analytics like statistical analysis of market trends (quantitative analysis and qualitative analysis), along with primary research such as interview findings with corporate officials.

If you’re working with a financial institution, your assets and accounts might involve or consist of credit and debit cards, checks, money market funds, margin loans and brokerage services.

The Asset Management Real Estate Process

You will pay a fee (as opposed to a commission) for asset management services. Typically, when you deposit money into your asset management accounts, it’s put into a money market fund with a larger return than you would see from standard checking and savings accounts.

You can choose between funds backed by the Federal Deposit Insurance Corporation (FDIC) or those that aren’t backed by this independent US Congress agency. A huge plus in the asset management process is that all of your investing and banking needs are handled by the same institution instead of different banking and brokerage account entities.

Top Asset Management Institutions

In 2020, the largest asset management institutions (based on global assets under management) included:

  • BlackRock, at $7.3 trillion,
  • Vanguard Group, at $6.1 trillion,
  • UBS Group, at $3.5 trillion,
  • Fidelity Investments, at $3.2 trillion
  • State Street Global Advisors, at $3 trillion

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