In early period of development of fund as a occupation, i.e., until the early 1950s, investment management was primarily concerned with the procurement of funds. The topic subject was primarily restricted to economic issues arising throughout episodic events like incorporation, merger, consolidation and reorganization. Therefore, the original position of the investment manager was to improve externally the resources needed by shared stock companies. The internal government of fund was either ignored or dealt with by the promoter entrepreneur himself.
With the passing of time, the position of investment manager has undergone drastic changes. Currently, the investment supervisor is responsible for deciding the total level of money required for both short-term (working capital) and long-term (fixed capital). This is done by appropriate forecasting and planning of finance. Secondly, their work account includes investing the resources in assets and projects, with the aim of creating profits. This is to be done in this way that the earnings tend to be more than the fee therefore that there is a confident internet come back to the concern.
Today the investment manager is concerned with the management of assets, raising and allocation of money, and valuation of the firm. Besides, he has to ensure the supply of funds to all elements of the organization, assess the economic performance, negotiate with bankers, financial institutions and other providers of credit, and record stock trade quotations and the conduct of stock price.
In a business enterprise, financing could be the linking url of all of the useful parts such as production, workers and advertising, and so the management of money is crucial to the smooth efficiency of the organization. The fundamental financial operations are investment , which handles acquisition of set assets; financing, which relates to raising expected funds from numerous resources; and revenue appropriation, which handles appropriating the gain received by the enterprise among the companies of funds.
Regarding investment , assets/ projects should be picked only by considering their web returns. Regarding financing, it is to be guaranteed that the organization gets the required financing at the best possible cost. Likewise, regarding income appropriation it is to be observed that adequate resources are provided for the developmental actions of the enterprise, without impairing the interest of the suppliers.
In a strong where these operations are in the offing and controlled effectively it can be stated that there exists effective investment management. Hence, investment management might be explained as that element of managerial activity which is concerned with the planning and managing of the economic methods of a firm.
As every business task needs investments, investment management is strongly connected with different regions of management. When investment is maintained precisely, other areas will even display good performance. Investment management helps in tracking the powerful deployment of resources in repaired and functioning capital. This may, in turn, ensure greater functioning of the enterprise.
Most of the procedures and assets in a business organization are managed with the exact same broad purpose, i.e., to attain the objective of the enterprise. So each source or region ought to be managed in such a way as to subscribe to the happiness of the goal of enterprise. Nevertheless, there are particular objectives for each practical area. In the case of permanent capital vehicles, the aim is to make sure that the firm obtains the required fund at the cheapest probable price, and employs it in the utmost helpful way.
To enjoy his role properly the investment supervisor has various instruments, such as for instance charge of capital, power, capital budgeting, working capital management methods and account movement analysis/cash movement analysis. Cost of money helps in determining the appropriate supply of finance. Usually the places with minimal expenses are selected, so the weighted average charge of money may be kept to a minimum. Money budgeting assists in deciding the proper investment combine; the available methods must be used in the absolute most profitable way. For this purpose, acceptable projects ought to be selected from option programs by using money budgeting techniques.