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Asset Management as a Service

asset management, service, buildingsDespite having no discernible talent for the disciplines required to be a great architect – art, maths, science – I have always been fascinated by buildings.

It’s not their structural beauty that impresses me, but how their construction and adaptability through the ages enable the great ones to endure by staying relevant for each new generation while mere mortals around them come and go.

In the early 20th century, Swiss architect Le Corbusier claimed that a house was a “machine for living in”. The term is often decried by some who interpret the phrase as suggesting a building should be simply functional. That’s not how I see it at all

As a descendant of a Swiss electrical engineer, I can tell you that all machines need to operate properly and carry out their intended function – but that function quickly becomes the vital component in this narrative. A machine carrying out the function of a family home needs to offer the group a place to feel safe, to connect with each other, but also help them to adapt to the changing world around them in the security of a unit.

Just as a machine in a factory making cars has adapted and evolved as we have moved away from horse-pulled chariots to electric vehicles, the machine for living in must adapt too.

This functional approach is not the mechanical, unbending method many have chosen to see, but one that is purpose-driven and ready to adapt to meet its inhabitants’ needs.

You’re all wondering how I can apply Modernist architecture to asset management, right?

It’s the same principle. It must adapt from a product-driven approach to one that understands and melds to what its clients need – and quickly.

"Asset management, the phrase, has diverged to mean two things"

Asset management, the phrase, has diverged to mean two things. One, the original meaning of managing an asset. Taking ownership of something and enabling it to either become or remain fit for purpose as the demands on it change. Two, instructing trading teams to buy whichever stocks, bonds, real assets or derivatives the fund or portfolio manager think will produce the best overall performance. With so many options – pardon the pun – it is easy to see all the figures in a portfolio as detached from the real world and any impact they might have.

Yet, assets, whether companies, buildings, infrastructure providing an essential function or even funding for specific projects, should not be taken on lightly. And as an industry, we need to concentrate on the first, original meaning of the phrase.

Last week a colleague tried, failed and eventually gave up on trying to reach Liverpool from Essex by train. A few weeks earlier, he had done the same trying to reach Cardiff.

I have lost count of the number of friends telling me they are moving offices due to price hikes, which have not been accompanied by an upgrade in accommodation or facilities.

Both instances indicate a loss of purpose. What is the point of a train journey that fails to deliver the passenger on time? How can companies pass on rent increases to already cash-strapped customers without meeting their evolving needs?

If the purpose of a house machine is to adapt to the changing needs of its users, why – as investors – don’t we take the same approach to all assets? By calculating the success of an asset by its purpose and service delivery, we are more likely to have something profitable in the long term, which will help with what we have become used to calling asset management today.

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