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What Are the Different Types of Fund Management?

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  • Written By: H. Bliss
  • Edited By: W. Everett
  • Last Modified Date: 14 April 2014
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Types of fund management can be classified by the investment type, client type, or the method used for management. Fund management is sometimes called investment management. Types of investments managed by fund management professionals include mutual funds, trust funds, and pensions. Fund managing companies may also handle hedge fund and equity fund management. A fund manager may also classify funds based on whether the client is a business or an individual person.

When classifying fund managing by client, fund managers are usually either personal fund managers, business fund managers, or corporate fund managers. Generally, a personal fund manager handles investments for individual investors. Personal fund managers typically deal with much smaller investment funds than business fund managers. A fund can be managed by a lone fund manager or by a team of fund managers.

Professionals who manage hedge funds are called hedge fund managers, and they tend to make a great deal of money. Hedge fund managers are generally paid both an upfront fee for fund management in addition to an incentive pay of a certain percentage of the performance of the hedge fund. Generally, investors dealing with hedge funds are extremely wealthy.

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Finding a good fund management professional usually involves trial and error combined with some help from investors in a position similar to yours. Generally, the investor allows a fund manager to handle a limited fund for a specified period of time and measures the success of the fund manager by the growth of the investment property. Sometimes, an investor can save time by consulting friendly fellow investors who can recommend a successful fund manager.

Fund management uses a means of making decisions called portfolio theory to increase the value of the investment properties they manage. Different types of portfolio theory are applicable in different investment situations. Sometimes, a fund manager might use multiple portfolio theories to manage a fund, especially if the fund includes multiple types of investments.

Hedge funds are usually only handled by exceptionally rich investors, making hedge fund managing an elusive but lucrative career goal because these jobs are hard to find but pay an impressive salary. These managers handle a complex system of multiple types of investments designed to protect the investor against risk. A hedge fund manager creates a balanced portfolio of different investments, some which may be in competition, to protect the investor against losses in his portfolio.

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