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How Does an Asset Management Firm Work?
Asset management firms take control over clients' assets, trading and investing on their behalf for a fee. The fee is usually a small percentage of the assets under management and may include additional carried interest in hedge funds. The business model is simple and revolves around managing clients' assets efficiently to generate recurring revenue. The firm consists of a product team responsible for investment strategy, a distribution team engaging with clients, and support functions similar to any other business. This model has been a fundamental part of finance for ages, making it one of the oldest and simplest business models.
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