Asset Management is a thriving business in Colombo Financial Centre. You can invest in the equity capital of an asset management company without much hassle. Your investment can be recouped within a short horizon.
There are 18 asset management companies registered with the Securities Exchange Commission of Sri Lanka (SEC). These companies are broadly grouped under Market Intermediaries and named as “Investment Companies”. These companies are permitted to handle investment management, investment advisory and associated activities. Investment management is where the company manages client funds on a discretionary basis. The asset manager makes up his own decisions in investing in stocks and bonds in accordance with an agreed investment strategy but without reference to the client. Investment advisory on the other hand enjoins non-discretionary management where the asset manager is permitted to advise his client and on consent being received he can invest in the recommended stocks and bonds.
All these asset management companies have two types of funds: One relates to own capital funds contributed by the owners by way of equity. Another much large pool of funds relate to the clients’ money which is also referred to as portfolio management be it discretionary or non-discretionary. Generally the percentage of own funds ranges between 5 to 10 % of the invested funds. Portfolio funds form the bulk of invested funds. The 18 asset management companies manage close upon one Billion U S $ in their portfolio funds.
These companies take the worry of financial affairs out of the clients unto themselves. They use professional skills in managing funds belonging to clients, who may be individuals or institutions, big or small, domestic or foreign. They manage a wide ranging portfolio of investments, in equities, fixed income or convertibles (debt that can be converted into equity). They tend to analyse investment needs of clients and structure a portfolio strategy that translates into a perfect match for clients risk/return profile. For example, in the case of a risk-averse client, the portfolio will have more fixed income: i.e. Treasury Bills and Treasury Bonds while for a risk-taking client more weight will be given to high growth equities. It must be emphasized that the investment strategy is formulated by asset manager only after consultation with clients and after obtaining their agreement to this effect. Investments made by asset manager would be in accordance with the agreed strategy and none else.
Business Opportunity
1. You can invest in the equity capital of existing asset management companies
2. You can also obtain approval as asset management company from the SEC; for this purpose you can use companies that are already floated but await capitalization from you
Inquiries are welcome from prospective investors who wish to have a piece of action in Colombo Financial Centre a star performer in the region. You can recoup your investment in equity capital of asset management companies within a short horizon depending on the market movements.
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