Assets Under Management
The total market value of the investments an asset manager oversees on behalf of clients, abbreviated AUM. It is the foundation of the business model, because management fees are charged as a percentage of AUM -- so AUM times the effective fee rate is roughly the firm's recurring fee revenue. AUM grows two ways: market appreciation of existing assets, and net flows (new client money in, minus withdrawals). The largest managers run into the trillions of dollars. Watch the split between the two growth sources: AUM lifted only by a rising market is more fragile than AUM won through net inflows.
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Book Value per Share
Open this term in the app → — no account needed; browse the full glossary while you research.