What is Asset Management?

What is an Asset?

Simply put, an asset is something of value that a company expects to provide it with future benefits. The International Financial Reporting Standards define assets as resources controlled by the enterprise because of past events and from which future economic benefits are expected to flow to the enterprise.

The most-owned assets across the globe consist of real estate and property, cash and digital bank deposits, public equities, and personal technology devices.

Cars can even be considered as assets, as whilst their value may depreciate, you can still convert the vehicle into cash, and they provide value to an individual, for example, allowing someone to travel to and from work.

What is Asset Management?

The term asset management is most commonly used to refer to financial asset management in the financial sector. Less commonly referred to types of asset management include physical and infrastructure management, which oversee the management of physical property, industrial equipment, public infrastructure, and other assets over their lifetimes, ensuring efficiency and output. This article will provide an insight into financial asset management.

Briefly, asset management is investing money on behalf of clients and identifying and managing a company’s assets to maximise their value, helping to reach their respective wider business goals. Clients who use asset management firms can be individuals, government entities, corporations, and institutional investors. In the process of maximising their portfolio’s value, asset managers and their clients communicate to maintain a level of financial risk that the client is comfortable with. Objectives can differ from client to client, with some targeting growth, others targeting income, and others capital preservation, for example.

Who are the top Asset Management Firms?

BlackRock is a clear example of a top global asset management company, with their assets under management (AUM) valued at a record-breaking $15.3 trillion in mid-2026. The firm managed more money than the projected nominal (not adjusted for factors such as inflation) annual economic output of every country, bar China and the USA, and nearly three times that of Germany, which is the EU’s largest economy. The majority of these funds, amounting to $8.9 trillion, are held in equities.

In the UK, market leaders include BlackRock UK, Legal & General Investment Management, Royal London Asset Management, and Fidelity International, as well as the wealth and asset management arms of J.P. Morgan, Goldman Sachs, and other prestigious investment banks.

Why does Asset Management matter in today’s economy?

Asset management drives the economy by channelling pooled savings into productive investments, whether that be through funding businesses, infrastructure projects, or government funding schemes. Firms play an important role in the wider financial system by ensuring the smooth and efficient buying, selling, and price-setting within capital markets. The better European capital markets work, the higher the incentive for international investors to pump money into European businesses.

Asset management attracts capital to the UK, with overseas clients’ AUM representing over half of all total managed assets by member firms of The Investment Association. The UK holds one-third of all European AUM, the largest market share by a wide margin, followed by France at 16.1%.

With regards to asset management’s economic impact on the UK, the industry accounts for roughly 5.8% of financial and related professional services gross value added (GVA). Fund management firms in the UK employed 23,000 people as of 2023, concentrating employment mainly in London and Edinburgh.

What does the future look like?

A report from Deloitte Ireland into the future of asset management highlights that human trust and client focus remain central amidst rapid technological change. AI, data, and new digital platforms are redefining engagement, operations, and access to investment. The report touches on the potential implications of increased AI use, including regulatory compliance, legal considerations, data privacy, and confidentiality.

Industry mergers are likely to occur between smaller and mid-tier managers amidst intense cost pressures. This is beneficial for firms, allowing them to achieve the necessary scale and efficiency.