Investment management offers some of the most sought-after finance roles and can be a fast-paced, demanding as well as potentially lucrative progression for your career. Investment management is an intellectually rigorous, sought-after career, and you will be required to utilise your analytical skills daily. In this article, we’ll share an overview of the roles available in investment management, if it is the ideal career progression for you, and how to stand out from the crowd.


What Is Investment Management?


As the name suggests, investment management involves managing a client’s investments; buying assets to provide them with the best financial return at the level of risk they’re willing to take on. Simply put, those working in investment management invest their client’s money by choosing the proper selection of investments from fast-growing, riskier stocks to safe, slow-growing bonds. An investment portfolio is handled by the investment managers, analysts, risk managers, traders, and sales who find investment opportunities that wouldn’t otherwise be available.


Investment Management Roles


There are four prominent roles within investment management; analysts, investment managers, sales and client relations, and infrastructure. If you are just starting, you will begin your career as an analyst before moving to investment management or sales and client relations.


  • Analysts: In this role, you would research and analyse potential investments, individual stocks and shares, as well as markets.
  • Investment Managers: Investment managers use their knowledge and the analyst’s reports to make investment choices for clients.
  • Sales And Client Relations: Within this team, you would be responsible for marketing the company, services, and products to potential as well as existing investors
  • Infrastructure: This team keeps the company running, and it encompasses everything from IT to HR. While they are not financial roles, they are vital to the success of investment management.


Choosing a Speciality


Analysts choose to become experts in particular areas such as property or emerging markets; investment managers typically choose between funded or private wealth management and institutional businesses.


  • Fund Management: This involves creating an investment portfolio using a pool of money from different investors. Both individual and corporate investors buy into and out of the fund via a broker or bank.
  • Private Wealth Management: Investment managers in this specialism manage the wealth of individuals with a high net worth which involves maximising their wealth and having a solid understanding of their life goals to make the right investments to meet those aspirations.
  • Institutional Business: This is similar to private wealth, but instead of managing the investments for individuals, the investment manager handles to interests of business needs.


Standing Out From The Crowd


To stand out from the crowd when looking to progress your financial career into investment management, you need to have a passion for investment and the right set of skills. Typically, firms that work in investment are looking for people who have excellent analytical abilities, a passion for the financial markets, communication and interpersonal skills, a client-oriented attitude, and a desire to work in a fast-paced environment, to name a few. It is also important to find your niche and decide what areas of investment interest you and upskill to learn more about it, such as alternative investment or private markets and equity. A private markets investment programme could help you enhance your skills and offer your clients the cutting-edge support they need. 


Alternative Investment


Alternative investment, as the name suggests, is a financial asset that does not fall into the conventional investment categories. Conventional categories tend to include stocks, bonds, and cash. In contrast, alternative investments involve commodities, private equity, venture capital, hedge funds, real estate, art and antiques, managed futures, and derivatives contracts. Alternative investments come in many types and are ideal for clients who wish to diversify their portfolios, and while they are typically riskier than conventional investments, they can offer higher financial returns.


Alternative Investment: What Are Commodities?


A popular choice when it comes to alternative investments is commodities. Commodities are tangible goods divided into four main groups; energy, precious metals, industrial metals and agricultural. As with other alternatives, the principal attraction is that they ordinarily have little correlation with other asset classes, although the prices can be highly volatile, rising and falling quickly. The overall state of the global economy and political factors can also have a significant influence on prices. For example, following the Brexit vote, many investors piled into gold as the metal often is viewed as a safe investment during periods of market uncertainty. 


Furthermore, as commodities tend to rise in line with the overall cost of living, they traditionally provide a certain level of inflation protection to investors. For instance, if fuel prices are rising on the UK’s forecourts, usually, it’s a reflection of higher oil costs.


Alternative investment managers will assist prospective investors in gaining access to the assets through a specialist fund or exchange-traded fund, also known as an ETF. Exchange-traded funds are a passive investment that mimics the performance of a specific market. In the same way as shares, ETFs can be traded in real-time on the stock exchange, and some have a particular commodity focus, which is known as exchange-traded commodities, or ETCs. Commonly, these track the price of resources so you can invest on behalf of your client in a physical gold ETC; this will provide you and your client with exposure to the metal. 


Finally, there is a wide variety of actively managed funds within alternative investments, and while some focus on physical commodities, others also mine businesses involved in the commodities industry. Commodity ETFs and funds come with high risks, which need to be managed by the investment manager to consider if the stakes are in line with the client’s goals or not. In addition, if income is your client’s primary goal, commodities may not be ideal as they offer little in the way of yield, and other alternative investments may be better suited to your client’s aspirations.


Ensuring Success


Investment management is a demanding and rewarding career choice that is best suited to those who are self-motivated, love spending time on research and have excellent analytical skills. A job in investment management will also require fantastic communication and writing skills; you will need to present your research to the clients or investment managers while proving why you have chosen to recommend buying or selling the financial products. In short, to achieve success in investment management, you will need to be as comfortable with research, organising arguments, and supporting your case with evidence as you are with numbers. 


As we mentioned previously, while investment management is a rewarding career, it is also demanding, and you will need to be available to put in the hours of work required. At entry-level, you will likely face a high amount of travel as well as the need to research the companies whose stock you’re evaluating, but your hours are typically self-generated. At the investment manager level, you are your boss and the level of work you put in does not necessarily reflect the hours you work; with experience, you will gain the ability to work smarter to grow your client’s funds.