What is Strategy in Strategic Asset Management?

I bet you have heard collocation “Strategic Asset Management.” If our reasoning is similar, you didn’t even think “strategic” actually means something. Many companies use a tinsel-like description of their services, such as “strategic,” “technical,” or “risk-averse,” just as a client trap. When in reality, “strategic” in “strategic asset management” completely changes the point of approach. But it also depends on your perception.  

So what is strategy? How does strategic asset management differ from ordinary one? Let’s turn to academic research and find the answers. Don’t worry. You won’t find overused terminology. Maybe, just a little bit.  

Asset management as a managerial approach and philosophy spread exceptionally quickly. Look at the latest news: the CEO of Goldman Sachs, the world’s most prominent investment banking firm, calls it the new growth engine. No wonder we observe such a variety of its branches. Strategic one is one of them. The mindmap in a recent study revealed that asset management is connected to strategy through the terms “decision making,” “maintenance,” “sustainability,” and “data,” which makes sense.  

I get that there is a link between asset management and strategy, but what is the role of the latter in the former? Unfortunately, strategy, in most interpretations, is theoretical and descriptive of business performance, competitive landscape, and market advantages. The researchers of the mentioned study confirmed the expectation that the strategic asset managers usually talk about is somewhat subjective and rarely relates to actual organizational strategy.  

So, are claims on strategic asset management just hot air? Yes and no (not in meliorate). I perceive strategic asset management as a holistic approach that relates to corporate-level strategy in the first turn. Basically, strategy in asset management should align with organizational context, expectations, future trends, and environment in general besides economic benefit. Strategy = comprehensive decision-making + awareness. Of course, asset management as a business approach encompasses various fields – social responsibility, risk management, outsourcing, and competition. And you need good decision-making and global awareness in each branch that, eventually, creates a strategy.  

Strategy = comprehensive decision-making + awareness

Another appearance of strategy in asset management that is worth remembering is the planning of asset portfolios and expected practices. KPIs in strategic asset management is always working, generating value and prospects for future development under the direct governance of asset managers. Don’t forget about practical things such as ISO 55000 adoption, which falls under the strategic asset management field. For example, even field staff engagement is a part of the operating performance of the company, although it’s frequently neglected or redirected to other departments. Here is the value of strategy in asset management – involving everything and everyone to work for a mutual aim.  

Despite debates, strategy in asset management will always be subjective, which is good. However, asset management spread heavily depends on conformity and standardization, which are vital factors in popularizing the approach and extracting the most value out of it. Still, some companies and managers exploit “strategic asset management” articulation but do none of it. Shortly put, haters gonna hate. 

Iryna Nykoriak

Published 01.03.2023


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