Why do some asset managers list on the stock exchange?
Why do some asset managers list on the stock exchange?
What does the asset manager do with the capital it raises? Does it just use it as some sort of seed capital for new funds it wants to launch or place them into the existing funds (but to what end)?
I understand share-based compensation schemes for employees do not make as much sense if the entity is not listed so is that enough of a reason?
I understand for an investment bank there are regulatory requirements to have some equity as loss-absorbing capital to protect depositors but obviously this does not apply to an asset manager...
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Let me ask you something else: If you knew about a company that makes million of profit per year and growing, with costs that are half that, would you not be interested to have a stake in this company?
Of course you would. And because the shares can be publicly bought, you can. I don't think you'd care if it's an asset manager or some other company.
An asset manager can do a lot with the capital it raises. It could get bigger and better offices, invest in a better computer system, maybe get faster access to exchange information, better information terminals, have more money for marketing and road shows. But the really big cash usually goes to acquire new talent. You might not need that much money for support staff, but a sales manager can be expensive, and a good fund manager can easily cost a high 7 to 8 figure number per year.
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