Glossary/Funds

AUM

Also known as Assets under management, Managed assets

Assets under management, or AUM, is the market value of investments that a manager oversees for clients or pooled vehicles at a stated date. The figure may include discretionary and non-discretionary mandates, leverage, uncalled commitments, or advisory assets depending on the definition used.

Editorially reviewed 2026-07-30

Why aum matters

AUM indicates organizational scale, fee base, purchasing power, and potential operating resilience, but it does not measure investment skill. Growth can come from performance, subscriptions, acquisitions, or definitional changes. Strategy capacity also matters: greater assets can lower operating cost per investor while making less liquid opportunities harder to trade. Investors should distinguish firm-wide assets from the assets in the particular fund and strategy they are evaluating.

How it is applied

Managers calculate AUM from position values, cash, accrued items, and fund or account ownership records. Due diligence reconciles reported figures with audited statements, regulatory filings, administrators, and performance reports. Analysts separate market appreciation from net flows, identify double counting in fund-of-funds structures, and compare gross assets with net asset value where borrowing is material. Regulatory AUM may follow prescribed rules that differ from marketing presentations.

Formula

Ending AUM = Beginning AUM + Investment gain or loss + Net subscriptions
Beginning AUM
Assets managed at the start of the period
Net subscriptions
Investor contributions less withdrawals and distributions

Portfolio example

A fund begins with $800 million, earns $64 million before flows, receives $100 million of subscriptions, and pays $40 million of redemptions. Ending AUM is $924 million. The 15.5% increase in assets should not be described as a 15.5% investment return because $60 million came from net new capital.

How to interpret it

Rising AUM can show demand or strong performance, but rapid inflows may dilute a capacity-constrained strategy. Falling AUM can reflect losses, redemptions, distributions, or deliberate capital returns. Comparisons require the same scope and date. Investors should examine AUM by vehicle, strategy, liquidity bucket, client type, and discretion rather than relying on one headline number. When comparing managers, use the same scope and date. Firm-wide regulatory assets, strategy assets, committed private-market capital, and net asset value are related but not interchangeable measures.

Limitations and common misconceptions

There is no single universal presentation outside specific regulatory definitions. Leverage can inflate gross assets, private valuations may be stale, and affiliated vehicles can be counted twice. Committed capital is not the same as invested capital. Currency conversion also changes totals. AUM says little about ownership concentration, liquidity, profitability, or performance and should be reconciled with supporting documents.

Sources and further reading

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