Investment management agreements (IMAs) are documents that outline the relationship between an investor and an investment manager. These agreements are critical in ensuring that both parties understand their roles, responsibilities, and expectations.

An investment management agreement typically includes several key components, such as the investment objectives, investment strategy, and fee structure. IMAs also outline the scope of services that the investment manager will provide, as well as the level of authority the investor grants them to make investment decisions.

Investment objectives: The investment objectives section of an IMA outlines the goals of the investor and the investment manager. These goals could include long-term capital growth, income generation, or a combination of both.

Investment strategy: The investment strategy section outlines how the investment manager plans to achieve the investment objectives. This may include a combination of asset classes, such as stocks, bonds, and alternative investments, as well as diversification strategies and risk management approaches.

Fee structure: The fee structure outlines the compensation arrangement between the investor and investment manager. This could include a percentage of assets under management, performance fees, or a flat fee structure.

Scope of services: The scope of services section outlines the specific services that the investment manager will provide. This could include portfolio management, investment research, and reporting.

Authority: The authority section outlines the level of discretion the investor grants the investment manager to make investment decisions. This could range from limited authority, where the investment manager must seek approval from the investor before making any changes to the portfolio, to full discretion, where the investment manager has complete authority to make investment decisions on behalf of the investor.

In conclusion, investment management agreements are essential in establishing a clear understanding between investors and investment managers. These agreements ensure that both parties are on the same page, and that the investment manager is held accountable for delivering on the investment objectives and strategy outlined in the agreement. As such, it is crucial that investors carefully review and understand the terms of any IMAs before signing on the dotted line.

Publicado: 13 octubre, 2021