Can someone explain the differences btwn asset mgmt, wealth mgmt, hedge funds, and all these other rainmaking finance professions etc like I’m 5 yrs old?

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Asset and wealth management are different industries (at the macro level, though often grouped together).

Asset management (or investment management) at the industry level is about managing investment strategies. Public markets and private markets both fall under the asset management industry umbrella. Hedge funds are one type of asset management firm (more a legal structure than anything else). Their strategies are typically more on the liquid end of the spectrum, but can also be somewhat illiquid (think private credit). PE firms are also a type of asset manager.

The wealth management industry shepards the financial objectives of individuals, and to some extend, smaller institutions. Part of wealth management is managing investment portfolios (either internally or via capabilities provided by asset managers). They also do things like financial/estate planning, cash flow, insurance, etc across the full financial needs of a client.


In short, different investment strategies


the two ways to think about the market are:
1 who do they serve. (Most common targets below)
Asset management - large institution
Wealth management - individuals and family offices
Hedge funds - asset managers and wealth managers

2 what are their investment strategies.
Asset management - low risk, fund of funds, public equities, and real estate
Wealth management - anything their clients are interested in
Hedge funds - riskier strategies. Typically still public assets

Obviously there are differences.

Last thing - I don’t think of wealth managers as making it rain, but someone please correct me


That’s better than I thought actually

Asset mgmt - usually public investments (although not always, i.e, real estate) and long-only (want asset values to go up via interest/dividend income or appreciation ) investing for institutions, pension plans, etc.

Wealth management - money management for people, families, or small institutions

Hedge funds- generally uses complex investments to either bet on a company/part of the market with investors or against investors. Manages money for institutions, pension plans, sovereign wealth, and ultra wealthy individuals.

Hope this helps.

Asset management - manage money for retirement, pension, insurance, institutions

Wealth management - manage money for rich people

Hedge fund - manage money that people can afford to lose

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