Financial dictionary

An acquisition is a process in which one company gains control over another company by purchasing its shares or assets. The goal of an acquisition may be business expansion, entry into new markets, acquisition of new technologies, or an increase in market power. An acquisition can be "friendly" if both parties agree to it or "hostile" if it occurs against the will of the target company's management.

An asset class is a category of financial instruments that share similar characteristics, market behavior, and risk profiles. The main asset classes include equities, bonds, real estate, commodities, and cash or cash equivalents. Each asset class responds differently to economic conditions and has distinct potential returns and risks. Diversification across different asset classes is an important component of an investment strategy, as it can help reduce the overall risk of a portfolio and increase its stability in various market conditions.

An asset deal is a transaction in which the buyer acquires specific assets of a company (e.g., real estate, equipment) instead of its shares. This approach allows the buyer to avoid taking on the company's liabilities and to acquire only the assets that are important to them. This type of transaction provides greater control over the acquired assets but may be less tax-advantageous for the seller.

Asset management is the professional management of investments such as stocks, bonds, real estate, and other securities, aiming to achieve the best possible returns for clients. Asset managers analyze financial markets, assess risks, and actively make decisions about buying or selling assets within a portfolio. Asset management services can be provided for a fee to individuals, institutions, and businesses.

An asset management company is a financial institution that manages investments on behalf of its clients. It pools funds from individuals or institutional investors and allocates them across various assets, such as stocks, bonds, real estate, or other securities. The goal is to optimize returns while adhering to investment objectives and considering clients' risk profiles. Asset management companies typically charge fees based on the amount of assets under management (AUM).

A total return of a fund since its inception is the percentage increase in the value of the investment in the fund from its establishment to the current date. This return takes into account all changes in the value of the fund, including any dividends, interest, and asset appreciation. It provides investors with an overview of the fund's long-term performance and helps them assess how effectively the fund has utilized invested capital over time.