The Clients of Asset Management Firms

Typically, asset management firms are categorized according to the kind of clients they serve. Clients generally fall into one of three categories: (1) mutual funds (or retail), (2) institutional investors, or (3) high net worth. Some firms specialize in one of the three components, but most participate in all three. Asset management firms usually assemble these three areas as distinct and separate divisions within the company. It is critical that you understand the differences between these client types; job descriptions vary depending on the client type. For instance, a portfolio manager for high-net-worth individuals has an inherently different focus than one representing institutional clients. A marketing professional working for a mutual fund has a vastly different job than one handling pensions for an investment management firm. 1. Mutual Funds Mutual funds are investment vehicles for individual investors who are typically below the status of high net worth (we will discuss Continue reading

Divestitures in Business – Concept, Reasons, and Benefits

In the modern world, so many organizations are using several strategies to enhance their performance and improve their competitive advantages. Some of the mostly relied on strategies are divestitures or mergers & acquisitions. The two though somehow different have some similarities. Mergers and Acquisitions refers to two companies combining together to form a single entity or one parent company absorbing another company and completely eliminating the entity of the target company to incorporate its operations in the parent company. Divestitures or rather divestment on the other hand is the opposite of investment and refers to the reduction/addition of the firm’s partial assets or complete sale of an existing business by a firm due to some ethical or business reasons. One of the reasons behind the above corporate strategies is to increase the firm’s chances of survival in a market environment characterized by many competitors and in particular perfect market industry. This is Continue reading

Reasons and Advantages of Using Special Purpose Vehicles in Project Financing

A special purpose vehicle refers to a firm whose operations are limited to the acquisition and financing of specific assets or projects. SPVs are usually established as subsidiaries whose assets and liabilities are structured in a manner that makes their obligations secure irrespective of the financial difficulties of their parent companies. Thus, a special purpose vehicle will be necessary to generate adequate funds to complete the project. Project financing refers to the raising of funds on a limited recourse basis for the purposes of developing a large-scale capital intensive project through a special purpose vehicle. Generally, the borrowed funds are often repaid using the revenue from the project. Reasons of Using SPVs in Project Financing One of the main reasons for using SPVs is to share the risks associated with implementing large-scale infrastructure projects with the financiers. SPVs are often formed as independent legal entities with several shareholders. The common Continue reading

International Marketing Communication – Key Issues and Challenges

When first starting-up an organization, launching a new product or service or simply reminding customers that the organization exists, firms need to educate consumers. This education comes in the form of marketing communication, which is otherwise known as promotion. Promotion is an organization’s articulation of messages it wants to send to target audiences to achieve business objectives. The promotion mix or integrated marketing communications (IMC) consists of advertising, sales promotion, trade shows, personal selling, direct selling and public relations. Without doubt, investment in one or more of these methods of communication will increase the firm’s costs, and for this investment to be a profitable one, the marketer must know the purpose of promotion. The Chartered Institute of Marketing claims that “the purpose of any form of marketing communication is to provide a set of information to your target audience in a way that encourages a positive, or buying, response. The Continue reading

Differences Between Social Entrepreneurship and Business Entrepreneurship

Before understanding the term social entrepreneurship, we need to firstly understand what traditional business entrepreneur itself is. An entrepreneur is an individual who owns a firm, business, or venture, and is responsible for its development. In order to do so, he or she will manage the resources he had. The aim of a traditional business entrepreneur or commercial entrepreneur is to generate profits from the risks and opportunities he or she is willing to take. A business enterprise therefore would be an entity that is owned by the business entrepreneur to achieve business goals that have been set by the entrepreneur. Social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change.  The definition of social entrepreneurship varies from a narrow definition to a wide one. Under the narrow definition, social entrepreneurship is basically the action of Continue reading

Role of Information System in Business Process Reengineering (BPR)

Business process reengineering concepts comes from management theories and introduce in 18th century. The purpose of business process reengineering is to make the business in best condition. The companies use the reengineering process to make the business in best position and to achieve the company goals. Business process reengineering means not only change but structural change. What kind of structural change in the organization, managing system, employee responsibilities, reward system, and information technology. Many organizations want to change the management of the organization but they not identified which part of work is to be changed. But the business process reengineering (BPR) is the concept of management and that has been formed by practical experience. BPR is not only impact inside the organization but also the external supplier and customer as well. BPR is help to increase the organization financial report and customer satisfaction and also find out the way how Continue reading