Institutional Asset Management Career Profile

Overview and Job Description of an Institutional Asset Manager

Institutional asset managers supervise and manage the investment portfolios of their clients, usually institutions, sovereign wealth funds, pension funds, corporations, and other large groups. The manager is responsible for having a clear understanding of their clients’ investment objectives and meeting those goals through strategic management of financial assets.

Ultimately, these portfolio managers are decision-makers and strategists who are entrusted to make the best financial choices for their clients. The ability to take quantitative data and translate it into strategies that meet a client’s financial needs is critical to achieving success in an asset management job.

The career of an asset manager is one of the most sought-after jobs in the financial services sector due to the independent nature of the work and lucrative salary expectations. The diverse day-to-day duties associated with asset management jobs can make the career very engaging, and it offers interesting challenges to those who enjoy financial problem-solving and uncovering new investment opportunities for their clients.  

Typical Job Duties in Institutional Asset Management

Institutions like large multinational firms have strong interests in taking advantage of promising investments that build capital and mitigate tax burdens. Once a manager feels they have a solid understanding of their client’s investment objectives and available asset classes, including bonds, public equities, private equity, real estate, and so on, they will assign weights to each asset class.

This activity, known as strategic asset allocation, allows asset managers to evaluate the risk and reward of each asset class, and make strategic investment decisions that yield the best results. Once those changes are made, a good asset manager will monitor the portfolio’s performance and make adjustments as needed.

Successful asset managers are excellent communicators and analytical thinkers with a knack for distilling multiple financial factors into well-informed business decisions. A job in asset management requires excellent relationship-building with clients so they have confidence in their manager’s ability to make the right call on behalf of their financial interests.

Compensation Factors and Salary Expectations for Asset Managers

Due to a few factors that affect compensation, there is a wide range of salaries associated with asset management jobs. These include:

• Industry: Some industries have greater demand for asset managers than others, and typically offer higher salaries based on that demand. 
• Location: As is the case for most jobs in the financial sector, positions based in large cities will provide higher pay than jobs found in more rural parts of the country. For example, New York City offers some of the most lucrative salaries for asset management due to its status as the central hub for financial services in the U.S.

As a general rule, the highest-paying asset management careers stem from massive hedge funds that manage millions of dollars in assets. However, large mutual funds and investment advisory firms can also offer impressive salaries for experienced managers.  

Job Qualifications for Institutional Asset Managers

Some years of experience in capital markets research or investment management are often required before individuals can qualify for a career in asset management. The career path of an asset manager commonly begins with a position as a financial analyst and works its way up the corporate ladder. Those who become asset managers usually stay in the role for many years and build up their assets under management (AUM) over time.