Why Companies Need Professional Asset Portfolio Management


An Article by Mr Michalis Economides, CEO and Founder ofChambersfield Economides Kranos, Advocates & Legal Consultants

Asset management isessential if a company is to maximize the return on investment (ROI) to itsshareholders and stakeholders. Despite its importance, however, many numerouscompanies and entrepreneurs neglect it and fail to provide the necessaryattention to the procedures required for an efficient asset managementstrategy. This can lead to their investments underperforming and they may findthemselves exposed and vulnerable to significant risks, due to financialfluctuations and the constantly changing market environment.   

There are numerousexamples of promising assets that have not reached their potential ultimatemaximum return value due to the implementation of mistaken strategies.Similarly, there are examples of entrepreneurs and individuals failing tocooperate with professional investment and finance-related experts, leading toa catastrophic devaluation of their assets and even, in some instances, tobankruptcy or liquidation. Such risks can be greatly reduced through properconsultation and using professional services related to the best exploitationof the company's assets.

Asset management takes arange of investments, allocated into various financial types and categories inorder to spread control and mitigate risk against potential losses.  Theaim, therefore, is to diversify the investments so as to minimize the exposureof assets to an actual risk, as well as, protect the volatility of the assetportfolio.

Diversification is arisk management technique that focuses on the allocation of investments to avariety of areas and instruments (e.g. immovable property, government bonds,shares, and trust funds), with the aim of maximizing ROI by implementingmitigation parameters of risk and differentiating the performance of assets inorder to protect them from a specific event or action.  Diversification isvery important because it can protect and enhance asset portfolio performancethrough risk weighting.  It is important to note that each investment typereacts differently to economic/financial fluctuations and specific marketevents. As an International firm, with a physical presence in more than eightcountries, providing legal, corporate, fiduciary and investment consultancyservices in more than 21 jurisdictions (including London, New York, Hong Kong,Beijing, Dubai, the Bahamas, Barbados, Belize, BVI, Cayman, Cyprus, Seychelles,Singapore, St Vincent & the Grenadines), we propose that entrepreneurs andindividuals should adopt a broader approach to their asset portfoliomanagement, in order to secure applicability on a global level.Multi-jurisdictional corporate transactions, wealth management, portfoliomanagement, trusts, private equity funds, acquisitions, restructuring, realestate investments and citizenship investments are just some of theinvestment-related services for which demand has been increasing over the lastfew years.

We suggest that, inorder to efficiently take advantage of extensive opportunities in the globalmarket, it is essential to appoint an International Law and Corporate Servicesfirm as a partner. This guarantees the correct due diligence and risk analysiswhile, from a legal and business perspective, such a firm will undertake riskmanagement analysis and identify systematic risks in order to safeguard theinvestor's position.

It is crucial that theinvestors and their legal and investment service providers constantly monitorinternational politics and relationships between nations in order to safeguardthemselves against possible domino effects caused by jurisdictional issuesand/or events. Our expertise in the international financial investment arenahas shown us that the present era is characterized by traditional investmentvia the acquisition of immovable property which is seen as the most trusted,stable and profitable avenue. However, investments in physical commodities(i.e. gold), private equity funds, trusts and joint ventures are alsoconsidered to be very attractive nowadays, since they provide investors with anopportunity to invest through pooled funds in high-value projects that promisea high ROI.

The "pool of funds"mechanism indirectly ensures that the performance of the project will have alower risk, if many powerful and reputable partners are involved. Moreover, wealso recommend various citizenship plans to investors as an additional and veryvaluable intangible asset in their portfolio. 

The acquisition ofadditional citizenship at once offers an immediate return with respect toinvestment opportunities, instant mobility for investors and their family,visa-free travel to many countries (depending on the chosen jurisdiction),financial freedom, security and stability. Citizenship by investment can beconsidered a long-term and never-ending investment since it can be transferredto the next generation.