ASSETS MANAGER/WEALTH MANAGER:
In some companies because of their size,there is a need to control their investments and protect them from risks that may harm their stability and remain competitive in the market.
This is done by creating organizational structures that start with a CEO,a Sales&marketing director,a Chief operating officer,a Chief financial officer,and others,who control and direct the day-to-day operation.
However,it does not matter how large an structure may be,they will always tend to take care of the results of the day to day,to obtain the objectives set in a business plan,budgets and others.
Therefore,the need arises to have someone who,from the side of the investors,is looking to increase the return on investment beyond what is planned,or where appropriate,to ensure that the economic targets set in the budgets can be achieved and that as a result they will generate cash flow to make new investments or guarantee the dividends offered to investors.
This position is called Assets Manager/Owner Representative or sometimes,Risks manager.
He reports directly to the owner or chairman of the company and although his work is to review and supervise an operation,he does not act as an auditor nor does he have legal representation,but he has the authority to supervise the activities of the unit or units that were assigned to him,without falling into direct intervention of the operation to avoid friction and confrontation between the teams work and their tasks,since in some cases units are not managed directly by the owner company but by third parties or operating companies that logically have their own systems,procedures and tasks that were previously agreed between those companies and the owners of the business units.
And precisely to avoid confusion or have duplication of tasks,it is necessary to be clear about the objectives of the assets manager.
But to begin with,we should describe first some of the skills that an assets manager must have.
If we talk about a hotel,he must be a professional with extensive knowledge and experience of what is the management of a hotel,hotels chain or a hotels group,considerering that his previous experience will serve him to make a more successful evaluation of the management of the business unit,therefore strong skills in:
Sales&Marketing
Operation
Administration
Will be highly appreciated,and in all cases the assets manager must have theoretical,practical and analitical skills,preferably trained in most departments that he will audit so he can fully understand the business strategies,operation,sales&marketing,management policies type of service standards,quality,sustainability and environmental care,as well as know the operation thoroughly in order to detect opportunities for improvement.
Generally speaking,the Assets manager aims to obtain the maximum return on real estate investment considering risks,profitability,times,liquidity and conservation of the unit.
For this purpose he seeks to reduce costs and expenses by increasing efficiency and obtain the best use of the assets in the delivery of a product or service,including the analysis of the operation,the use and replacement of major equipment in the idea that the objectives of the owner company that equally includes the supervision of maintenance are achieved,security,risks of any kind,cleaning and order throughout the property for the conservation and revaluation of the property.
Reviewing business financial,operational and sales&marketing strategies to optimize performance.
Among these activities is the review of inactive resources,high-use resources,no flow trust resources,warehouse control,treasury,receivables, etc.
To carry out his work,the Assets Manager must have defined his daily,weekly and monthly tasks supported with a work plan where he can capture the activities he will perform,frequency,the areas to be reviewed,his program of physical inspections to the property,the reports he will receive and the reports he will prepare with information to the owner company.
This should be based on performance indicators (KPI's)in all cases,in order to detect the variations between the real and the budgeted indicating an alert sign to make a research,designing his own formats or chart statistics that will show him an accurate vision of the company′s status,all based on the budgets of the year or month,costs,expenses,cash flows,inventory turn over,receivables status,revenue,occupancy percentages,average sales,balance sheet and others... any variation could represents a risk of not achieving the economic objectives.
WHAT ARE THE GOALS AN ASSET MANAGER SHOULD HAVE?
THE REPRESENTATION OF THE OWNER COMPANY
IMPROVING EFFICIENCY IN OPERATION
SALES INCREASE,BALANCE BETWEEN REVENUE MANAGEMENT AND MARKETING
REVIEWING ECONOMIC RESULTS
In the first case,reviewing capital expenditures,business and work plans,and a market study in which it is considered: competition,functionality and the internal sales efforts,paying special attention to risks from economic turbulence,social risks,the environment status and maintenance of facilities and equipment.
In the second approach,he must look on how to improve the operation and increase the quality of service,reducing costs and expenses,making sure there is a guide to measure the performance of the management of the business unit (hotel),a preventive maintenance plan and its monitoring,a capex plan regarding the replacement of equipment,a training plan for the staff,operating standards of quality and service for all departments,he will review the operation to measure efficiency in all areas of personal contact with guests and customers,analyzing remodelation plans or the addition of new services always looking for fundamentals to justify the investment such as: increases to the room rate based on a short,medium and long term plan showing the areas that are going to be remodeled specifying how long the remodelation will last and when this is going to happen considering that:
Business will remain above the competition
Will Increase the market share
Will Improve operating efficiency,reducing costs and expenses in the medium and long term
The remodeling plan will extend the property life cycle
If this will help to increase the percentage of occupancy and average rate by having a property in a high shape of appearance and functionality.
In the third approach,the structure of the sales and marketing plan will be reviewed mainly to sales processes,the market share,the competition,reviewing the pricing and rates strategy for:food and beverages,lounges,rooms,spas,golf course and other services,and through an in-depth analysis,make recommendations to optimize resources,but also to prevent sales budgets from being unattainable(over estimated sales targets)or that business strategies are too aggressive that can puts them at risk of losing market share which bringing together a price hike without reason and a lack of a renovation and maintenance plan could detract the value of the property (downgrading of asset)
In the fourth approach,he seeks that through the review of the financial statements he can analyze the yields and productivity of all areas,identifying the opportunities for improvement in business strategy and at the same time,find better use of revenue,analyzing market conditions,trends and the impact that could have on the company,but visualizing the opportunity to increase profit and return on investment.
Anyone might think the tasks and activities of an Asset manager/Risk manager are similar to those performed by a manager,comptroller or internal auditor,,,however,while the managers' approach may be focused to the day-to-day operation,to prevent fraud, avoid expenses and control costs and others... the Asset Manager is responsible for the overall objectives and that those are reached and somehow increasing the return on investment through detecting those small details that we miss in the management of an operation for the speed of the day to day and that somehow,they can represent certain percentages of profit rather than loss and although percentages can be low numbers,,,in money can represents millions and thus he seeks to make his intervention more as an external advisor and not that as an inspector who is detecting failures,but opportunities for improvement which can be reflected in the short,medium or long term.
What about Risks?
As assets manager you have the responsibility to identify,assess and control any threat to the company by defining a risk analysis which will show where the greatest vulnerabilities may be.
As it is well known,unexpected events can harm any business,increasing costs and expenses that could cause a temporary or permanent close of the operation.
Management risk allows you to prepare and get ready for any of those unexpected events,such as:earthquakes,hurricanes,flood,social or economical turbulence and others,by minimizing risks before they happen.
Asset management is not the same as Wealth management:
Although tasks may seem similar,there is a difference between these two tasks,the first refers to manage the properties portfolio and it could involve:equity,real estate,global investments and it is focused to maximize ROI.
Wealth management in the other hand,refers to oversee financial aspects and it may include:taxes,estate,cash flow and everything that relates to the use of money,focusing in maximizing their wealth and protect it
With this description,you can see that while the operator is dedicated to achieve the results of the day to day....the Asset manager focus his efforts not only to avoid risks of any kind,(commercial, operational or administrative)but to keep and revaluate the property so that economic investment last long and ROI is higher than it what was calculated in the feasibility study made at the time it was presented to investors for analysis and decide on the allocation of funds in a local, regional or international business.