Asset management

People take care of things they own.

This is called asset management. Assets can be physical things. They can be buildings or big machines. Assets can also be money or ideas.

Some people manage money for others. They help people save for later. They can work in a hard way. Or they can work in a simple way. This helps money grow.

Teams also look after big tools. They look after solar parks. They look after windmills too. They fix things so they work well. This keeps costs low.

Some people even manage nature. They look after forests and farms. This can help keep the land healthy. It is a smart way to work.

Asset management is a way to look after things of value. These things are called assets. An asset can be a physical object. It could be a building, a machine, or a bridge. Assets can also be things you cannot touch. This includes money, ideas, or brands.

Some people work in the world of money. They are called asset managers. They manage investments for other people. They can work in an active way. This means they study assets to make a plan. This way costs more money. They can also work in a passive way. This is a simpler way that costs less.

Other teams manage big tools like solar parks and windmills. They fix and upgrade these tools. This helps things work well for a long time. Some people even manage nature. They look after forests and farms. These are called natural assets. This can help keep the land healthy. There are even special companies made to do this work.

Asset management is a systematic way to look after things of value. These valuable things are called assets. An asset can be a physical object like a building or a machine. It can also be something you cannot touch, like an idea or a brand.

This process helps people manage the entire life of an asset. They develop it, use it, fix it, and eventually get rid of it. The goal is to do this in the most cost-effective way possible. This means balancing costs, risks, and how well the asset performs.

In the world of money, people use different ways to manage investments. Some experts use active asset management to help their clients. They study assets closely to create special plans and give advice. This takes a lot of work, so it costs more money. Other experts use passive asset management instead. They simply mirror a market or a sector index. This way is much less laborious and costs less for the investor.

Many people now use index funds or exchange-traded funds for this reason.

There is also a special kind of management for physical things. This is often called infrastructure or engineering asset management. It is used for big things like power plants, water systems, and bridges. These teams must decide which things to fix first when money is tight. They use many different types of engineering to keep everything running safely. This includes things like maintenance engineering and risk analysis. As we use more renewable energy, teams now manage solar parks and windmills too.

Some people are even trying to manage nature as an asset. These are called natural assets, and they include forests, farms, and oceans. New companies called Natural Asset Companies (NACs) are being created for this. They want to invest in things like keeping water clean or preventing soil erosion. In October 2021, leaders in Sabah, Malaysia, signed a deal regarding forest ecosystems. They gave a company rights to manage two million hectares of forest. This was done without the knowledge of the local Indigenous communities.

To keep everything organized, there are international rules called ISO standards. The ISO 55000 series provides the requirements for a good management system. These rules help organizations in many different fields work the same way. They define an asset as anything with value to an organization. Whether it is a computer program or a large factory, these rules help. By following these standards, people can better protect the things they value. This helps make sure that assets stay useful for a long time.

Asset management is a systematic approach to governing and realizing value. This process applies to any entity or group responsible for specific assets. An asset is defined by the ISO 55000 standards as an item or entity with actual or potential value. These assets can be tangible, meaning they are physical objects like buildings or equipment. They can also be intangible, such as intellectual property or financial assets. The goal is to develop, operate, maintain, upgrade, and dispose of these items cost-effectively. This requires balancing costs, risks, and performance attributes throughout the asset's entire life cycle.

In the financial sector, asset management focuses on investment management. Portfolio managers, also known as asset managers, handle investment funds and client accounts. This work is typically divided into two distinct methods: active and passive management. Active asset management involves experts who closely study assets to create specific plans. They provide recommendations based on the financial health of each client. Because this requires significant labor, it comes at a higher price for investors.

Passive asset management is a different approach used to mirror a market or sector index. This method is much less laborious than active management. It is not as tailored to specific individuals, but it is significantly cheaper. In recent decades, passive strategies like index funds and exchange-traded funds have gained massive market share. Some experts, such as Benjamin Braun, note a shift toward "asset manager capitalism." This occurs because American stock ownership is concentrated among a few large, diversified asset managers. These managers may not have a direct interest in the specific performance of individual companies.

Physical and infrastructure asset management involve different specialized practices. This field combines management, finance, economics, and engineering to provide service at the best value. It covers the entire life cycle, including design, construction, commissioning, and decommissioning. In the 21st century, infrastructure management became vital in many developed countries. This is because most infrastructure networks were already completed during the 20th century. Now, these nations must focus on operating and maintaining those networks cost-effectively.

Engineering asset management is a specific discipline for managing complex physical assets. It uses multidisciplinary engineering methods to balance cost, risk, and performance. This field often utilizes Terotechnology, which blends management, engineering, and financial expertise. It includes several sub-disciplines like maintenance engineering, systems engineering, and reliability engineering. It also incorporates process safety management, industrial engineering, and risk analysis. These specialists work to maximize value for owners while keeping risks at acceptable levels.

Natural asset management is an emerging field dealing with forests, marine areas, and farmland. Natural Asset Companies (NACs) are new entities designed for direct investment in conservation. These companies license rights to ecosystem services like carbon retention and freshwater generation. In September 2021, the New York Stock Exchange announced plans to list NACs as a public asset class. However, the NYSE later withdrew its proposal in January 2024 following political backlash. One specific event occurred in October 2021 in Sabah, Malaysia. Leaders there signed an agreement giving a company management rights to two million hectares of forest. This agreement was made without the knowledge of the local Indigenous communities.

Technology plays a massive role in modern asset management through various digital systems. Enterprise Asset Management (EAM) systems use asset registries and computerized maintenance management systems to support organizations. These systems often use Geographic Information Systems (GIS) to represent networked assets. A GIS-centric registry helps users share and reuse information more efficiently. Other specialized areas include Software Asset Management (SAM) for IT environments. There is also Digital Asset Management, which focuses on electronic media content. These diverse systems ensure that both "hard" physical assets and "soft" assets, like licenses, are managed properly.