Strategic capital investments in asset management: a value-based approach

What is it about?

Value is a fundamental principle in Asset Management (AM), guiding decision-making processes towards optimization. The development of Value Models capable of measuring the impact of decisions on value is crucial for informed decision-making. However, a significant gap exists in the literature regarding systematic approaches for identifying and implementing value-based decisions. This study aims to fill this gap by introducing a novel methodology that integrates Multi-Criteria Decision Making, AM principles, and participatory processes, offering a comprehensive approach to establishing value models that support decision-making in strategic capital investments for multi-category portfolio The Analytic Hierarchy Process and Multi-Attribute Utility methods are used as analytical tools enabling the assignment of absolute merits to the evaluated alternatives. The application of the AM principles allows to frame the decision problem within the context of AM. Furthermore, participatory processes enhance transparency and trust in the developed value model and to empower employees. Through a case study application, the methodology is demonstrated to streamline the ranking of alternatives, offer deeper insights into their strengths and weaknesses, and promote a shared understanding of objectives within the organization, thereby significantly enhancing the decision-making process.

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