Assets under management

In finance, assets under management (AUM), sometimes called funds under management (FUM), measures the total market value of all the financial assets which a financial institution such as a mutual fund, venture capital firm, or brokerage house manages on behalf of its clients and themselves.

Overview

Assets under management (AUM) is very popular within the financial industry as a measure of size and success of an investment management firm, compared with its history of assets under management in previous periods, and compared with the firm's competitors.^[1] Methods of calculating AUM vary between firms. Investment management companies generally charge their clients fees as a proportion of assets under management, so assets under management, combined with the firm's average fee rate, are the key factors indicating an investment management company's top line revenue. The fee structure depends on the contract between each client and the firm or fund.

Assets under management rise and fall. They may increase when investment performance is positive, or when new customers and new assets are brought into the firm. Rising AUM normally increases the fees which the firm generates.

Conversely, AUM are reduced by negative investment performance, as well as redemptions or withdrawals, including fund closures, client defections and other generally adverse events. Lower AUM tend to result in lower fees generated.

AUM includes

Assets under management includes:

• Capital raised from investors;
• Capital belonging to the principals of the fund management firm.

For example, if fund managers contribute $2B of their own capital to the fund and raise additional $10B from investors, their AUM is $12B.^[2]

See also

• Net asset value

References

External links

• Fund Management Activities Survey 2005
• Sovereign Wealth Fund Assets Under Management

Hedge funds
Investment strategy	Arbitrage / Relative value Capital structure arbitrage Convertible arbitrage Equity market neutral Fixed income arbitrage / Fixed-income relative-value investing Statistical arbitrage Volatility arbitrage Event-driven Activist shareholder Distressed securities Risk arbitrage Special situation Directional Convergence trade Commodity trading advisors / Managed futures account Dedicated short Global macro Long/short equity Trend following Other Fund of hedge funds / Multi-manager
Trading	Algorithmic trading Day trading High-frequency trading Prime brokerage Program trading Proprietary trading
Related terms	Markets Commodities Derivatives Equity Fixed income Foreign exchange Money markets Structured securities Misc Arbitrage pricing theory Assets under management Black–Scholes model (Greeks (finance): Delta neutral) Capital asset pricing model (Alpha / Beta / Security characteristic line) Fundamental analysis Hedge Securitization Short Taxation of private equity and hedge funds Technical analysis
Investors	Vulture funds Family offices Financial endowments Fund of hedge funds High-net-worth individual Institutional investors Insurance companies Investment banks Merchant banks Pension funds Sovereign wealth funds
Regulatory	Fund governance Hedge Fund Standards Board
Alternative investment management companies Hedge funds Hedge fund managers

Private equity and venture capital
Basic investment types	Buyout Venture Mezzanine Growth Secondaries Equity co-investment
History	History of private equity and venture capital Early history of private equity Private equity in the 1980s Private equity in the 1990s Private equity in the 2000s
Terms and concepts	Buyout Financial sponsor Management buyout Divisional buyout Buy–sell agreement Leveraged recapitalization Dividend recapitalization Venture Angel investor Business incubator Post-money valuation Pre-money valuation Seed money Startup company Venture capital financing Venture debt Venture round Structure Private equity firms and funds Limited partnership Limited liability company Carried interest Management fee Publicly traded private equity Business Development Company Venture capital trust Private investment in public equity (PIPE) Pledge fund
Investors	Corporations Institutional investors Pension funds Insurance companies Fund of funds Endowments Foundations Investment banks Merchant banks Commercial banks High-net-worth individuals Family offices Sovereign wealth funds Crowdfunding
Related financial terms	AUM Cap table Capital call Capital commitment Capital structure Distribution waterfall EBITDA Envy ratio High-yield debt IPO IRR Leverage Liquidation preference M&A PME Taxation of private equity and hedge funds Undercapitalization Vintage year
Private equity and venture capital investors Private equity firms Venture capital firms Angel investors Portfolio companies