What is meant by ‘real assets’? Surely all types of assets are real, or else no one’s going to get very far in buying and selling them?
When it comes to assets, we use the term ‘real’ in the sense of being something tangible. A physical entity, not like other ‘financial instrument’ asset classes such as derivatives which are financial instruments that work on an IOU basis or traditional assets like stocks and shares. No, real assets are ‘real’ things like gold, silver, an estate, artwork, commodities or wine….
The real deal
Investors are often recommended to include some real asset investments in their asset portfolios. They generally don’t tend to be as risky an investment as some other asset classes, so it can be a nice way of ‘diversifying’ a portfolio – a risk management strategy that involves balancing out the risk levels by investing in different types of higher and lower risk assets).
Portfolio managers and fund managers at investment banks, asset management firms and hedge funds will have to be clued up on real assets, as they will have to select which to invest in on the portfolios they manage. The people who will provide them with the information on potential investment opportunities across the world are the asset research analysts.
Some asset research analysts will specialise in real assets, tracking hundreds of opportunities in various locations that could work well as investments for the firm or bank’s clients.
As with all investment roles, real asset jobs don’t come easy. If you want to get involved with this side of the finance world, you’re going to have to build up your repertoire with at least a 2:1 in a finance related degree (most firms prefer these however in some circumstances will consider non-finance related disciplines) along with some top notch experience in asset management. There are some internship opportunities available, and some of the big name firms won’t even consider hiring you without this kind of experience, so it’s really important to start thinking about getting to grips with this industry now through placements and opportunities through your finance society at university.