Jean-François De Clermont-Tonnerre Explains How Asset Management In Malta Is Thriving

Jean-François De Clermont-Tonnerre Explains How Asset Management In Malta Is Thriving

Managing your assets carefully has never been more important, but the present and future of asset management in Malta is bright for clients and the experts working on their behalf.

As an asset manager, I spend most of my waking hours thinking about how to nurture the funds with which my company has been entrusted. I am lucky enough to be working here in Malta with outstanding, principled colleagues in one of the most exciting financial markets in Europe.

Why is asset management so important now?

Financial decisions are always important, but during times of economic uncertainty they can take on new complexity and significance.

Asset management is the way you manage your financial assets in order to achieve specific financial and personal goals. It often aims at increasing the total value of your assets, and you can achieve this through different strategies of saving, investing and spending.

But when stock markets are so volatile and many businesses are contemplating serious, long-term disruption to their operations, it becomes increasingly difficult for non-experts to make clear, effective judgements about how to manage those assets.

A decision to invest in a particular product at the wrong moment can bring serious repercussions because markets are moving so quickly. Expert advice may re-direct your entire strategy, mitigating risks which are not apparent to someone with less experience.

How can an asset management company actually help now?

I believe the biggest strength of any asset management company is the collective ability of its team. The mix of skills and experience ranges from highly specific market knowledge to strategic vision and direction.

The quality of the team enables the company to manage its funds effectively for all its clients, identifying opportunities and risks to inform timely, effective decisions.

These companies analyse vast amounts of data and then use their experience and understanding to make investment decisions, while always managing risk in accordance with their clients’ wishes.

A good asset manager will communicate clearly about the state of your asset portfolio and provide timely, accurate advice about your strategy. They will have at their fingertips information about markets as varied as bonds, stocks, property and commodities, so they can position your assets as well as possible.

What sort of funds do asset management companies offer?

Asset management companies offer a huge range of different types of funds, each designed to provide different types of returns depending on the client’s attitude to risk and return.

For example, at AUM we design all our funds to maximise total return, which is the amount of value an investor earns from a security over a specific period, usually one year. This means we focus on the growth of a portfolio rather than on its ability to generate regular income.

To do this, we use various different types of funds, including private equity funds and hedge funds.

The difference between hedge fund and private equity fund

Private equity funds and hedged funds are very similar in many ways, especially as they are driven by the same basic concept of investing money from different parties together to generate a return.

The key difference is that a private equity fund is usually set up for a fixed period, often 10 years, and tends to invest in entire companies during that time. This sort of asset is referred to as illiquid, in that it is not traded frequently.

By contrast, a hedge funds are considered alternative investments, working with more liquid assets, such as minority stock positions, to generate a return more quickly.

AUM and other asset management companies also use long-only funds, which are specifically designed to only invest in assets which are currently undervalued and should therefore increase in value over time.

They understand different clients’ needs

One of the reasons we offer different types of funds is that clients have such a range of needs when it comes to asset management. We tailor and maintain investment portfolios which reflect these different requirements, and advise on the types of funds to invest in.

We have strong relationships with our clients, and are always reviewing their needs so we can ensure the portfolio meets their requirements.

Assessing investments beyond the bottom line

Sometimes doing a good job for the client means looking beyond financial performance, analysing ethical and social issues which can have long-term impacts on an asset.

This includes human rights and consumer protections, which can become a major risk for investors if they are neglected.

The environmental impact of any given investment is also important. This can have an effect on an asset’s value due to changes in regulation or consumer demand, but is also a moral issue for many investors.

Huge potential of asset management in Malta

Whatever strategy you wish to pursue, Malta offers many advantages for finding a top quality adviser and third-party providers. In particular, asset management in Malta can call on companies which provide excellent support functions, such as corporate and risk management services.

Without these support services, companies like ours would not be able to operate effectively, but their presence opens up real opportunities for individual and corporate investors.

The country does face some challenges, especially in the banking sector, but local and international banks are already stepping up to address these issues. I believe we will be in an even stronger position as these banks recognise the value offered by operating in Malta.

Malta’s people can make it a global player

One reason I feel confident in the long-term success of AUM and other Maltese firms is the quality of the workforce in this country.

Having worked mainly in Switzerland during my career, I originally saw AUM mainly as a foothold for investing in the EU, but I have been delighted with the depth of talent that is available here.

My Maltese colleagues at AUM (add link to AUM AM people website) are among the most capable I have ever worked with, and the quality of graduates from the University of Malta really is outstanding. I have recruited staff all over Europe, and the willingness and ability of these young people to work hard, learn well and contribute is at least on a par with anywhere else.

Overall, I cannot think of an industry and place I would rather be working in than asset management in Malta. The country is packed with potential for companies like ours to offer clients peace of mind and the security of knowing experts are taking care of their assets.

The information contained in this article is not intended as, and shall not be understood or construed as, financial advice. The information is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.

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