Meaning & use
OPM
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Meanings
abbreviationuncountablebusinessfinance
Other People's Money: money that a person or firm invests or manages on behalf of clients rather than their own funds.
Grammar: Used as a noun and usually without 'the'; it names a kind of capital, not a particular sum.
Patterns
- invest OPM
- manage OPM
- use OPM to do something
The fund grew quickly because it was built almost entirely on OPM.
He likes the idea of earning fees by managing OPM rather than risking his own savings.
Critics say the scheme looked safe only because so much OPM was flowing in.
abbreviationproperAmerican
Office of Personnel Management: the US government agency that handles hiring rules and benefits for federal employees.
Grammar: Takes 'the' when written out: the OPM announced the change.
Patterns
- the OPM announced something
- apply through the OPM
The OPM published new guidance for federal workers last week.
She checked the OPM website before applying for a government job.
Pay tables for civil servants are updated by the OPM each year.
abbreviationuncountablebusiness
Other People's Money: a business model in which a company earns fees from handling clients' funds instead of putting up its own capital.
Grammar: Often used with 'model' or 'business': an OPM model, an OPM business.
Patterns
- an OPM model
- an OPM business
Asset managers are a classic OPM business: they charge a percentage of the assets they look after.
The report contrasted OPM models with firms that trade using their own balance sheets.
Investors warmed to the OPM approach because the company took on very little risk itself.
Common combinations
- OPM model
- Under an OPM model, the firm earns fees without tying up its own capital.
- manage OPM
- Banks have long made money by managing OPM for wealthy clients.
- invest OPM
- Rules limit how much of a client's money a broker may invest as OPM.
- OPM business
- Their OPM business brings in steady fees even when markets are flat.
- a pool of OPM
- The startup raised a pool of OPM and charged a management fee on it.
- OPM arrangement
- Regulators looked closely at the OPM arrangement between the two firms.
Synonyms and how they differ
- client money
- Clearer and more literal in everyday business writing, but it does not carry the slightly critical tone that OPM sometimes has.
- third-party funds
- A formal term used in finance and law; it fits contracts better than the short, informal OPM.
Opposites
Word family
- OPM abbreviation
- The same three letters also stand for Office of Personnel Management in US government contexts.
Commonly confused: OPM or IPO? OPM or OPEC?
OPM vs IPO
An IPO is a company's first sale of its own shares to the public, while OPM refers to money belonging to other people that a firm manages.
OPM vs OPEC
OPEC is an organization of oil-exporting countries; it looks and sounds similar but has nothing to do with managing funds.
Practice
A wealth manager says her firm 'runs on OPM'. What does she mean?
Choose one answer.
In business, OPM means Other People's Money, so the firm is handling clients' funds. Option 0 is the opposite (own capital), and option 2 confuses the finance sense with the government agency sense.
Make it your own
Write a sentence using “OPM”, then check it and compare it with the examples above.