Technicals

Question 1

How do you value an asset?

Answer 1

Asset is a resource that has economic value. Discounted cash flow method. (Any asset that’s generates cash flow)
Comparable company /trading multiple analysis.
Past transactions.

Question 2

Tell me about different asset classes

Answer 2

Cash
Stocks (equity)
Bonds (fixed income instruments)
Alternative investments (property, PE, commodities, hedge funds)

Question 3

Do you follow financial markets?

Answer 3

Read FT

Question 4

What are the different types of clients?

Answer 4

Mutual funds (or retail)
Institutional investors
Net worth individuals

https://www.mbaknol.com/investment-management/the-clients-of-asset-management-firms/

Question 5

What are the different risk appetites and why does it vary based on clients?

Answer 5

High risk = risk seeking organisations
Low risk = risk averse organisations
Risk neutral

https://learn31000.com/risk-appetite/

Question 6

Sizes and differentiating factors of clients

Question 7

What effect does inflation and interest rate have on the industry and how does it affect clients?

Answer 7

Very high inflation can have a negative impact on assets such as stocks and bonds, this is usually because “too many dollars are chasing too few goods”. Maintaining a constant allocation to inflation-hedging asserts can help investors cushion their portfolios against unexpected spikes

Question 8

What is liability driven investing?

Answer 8

Gaining enough assets to cover all current and future liabilities. Essentially investing in things that guarantee that you can meet the promises that you make, with the promises of a return being the liability

Question 9

What’s the state of the world of investing in pension schemes/ insurance landscape/ sovereign wealth funds?

Question 10

What is the current regulatory landscape looking like?

Question 11

What are the new regulations that have come into play that are impacting asset managers and how they carry out business?