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What is Capital Investment Management?

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  • Written By: Jim B.
  • Edited By: Melissa Wiley
  • Last Modified Date: 11 October 2018
  • Copyright Protected:
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    Conjecture Corporation
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Capital investment management is the process by which an individual investor entrusts the management of his investment funds to professional investment experts. Such experts usually are part of a large firm that specializes in gathering funds from wealthy individuals for investment opportunities. These opportunities usually come via equity investment strategies like venture capital or private equity, which usually give the investors some share of the businesses in which they invest. With good capital investment management, an investor can feel safe in the knowledge that his funds are being properly handled.

Many people have the funds to get involved with business investment but lack the knowledge or the experience to begin. They also may wish to go beyond the simple trading of stocks and bonds, instead wishing to have ownership stakes in some of the businesses in which they invest. This type of investing can be extremely profitable, but it is hard for a lone individual to undertake without help. That is where capital investment management enters the picture.

For some, capital investment management may take the form of a single advisor who suggests how a person should attack her portfolio. More commonly, the term refers to the kind of fund management that concentrates on high-stakes forms of business investment. Capital investment itself usually refers to the kind of investment that a company uses to purchase assets that will help its business grow, as opposed to money sought for daily operations.

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By surrendering control of his money to capital investment management, an individual investor can take some of the pressure off his own decision-making process. Of course, choosing the right management then becomes paramount, as no investor wants to risk his capital with a firm or management group that cannot protect it. Professional advisors and experts in business financing can spot companies that have the potential for significant growth and thus can earn big profits for anyone who chooses to invest with them.

The two most common forms of capital investment in private businesses open to investors are private equity and venture capital. They are similar in that they both represent investment in privately owned businesses that are looking to grow and need the capital to do so, capital that investors provide in return for equity. Private equity is usually focused on mid-market companies that may be struggling or are looking to take on new initiatives, while venture capitalists usually target companies that are just starting out. In either case, capital investment management is designed to seek out these opportunities for investors while stressing portfolio diversity to lessen risk.

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