Assets under management (AUM) is a financial term denoting the market value of all the funds being managed by a financial institution (a mutual fund, hedge fund, or brokerage house) on behalf of its clients, investors, depositors, etc. This metric is very popular within the financial industry and is a sign of size and success of any firm against its competition. The AUM is calculated by different methods.
In the most basic sense, the Assets Under Management metric represents the number of dollars on which a financial firm has the legal right to claim a management/advisory fee. This fee is based on the client's contract with the firm and/or fund in question. Thus in a given firm the Assets Under Management are not a constant. AUM is reduced due to redemptions, withdrawals and other events where investors no longer pay a fee to the manager in question to advise their portfolio. Likewise AUM can increase when new assets are brought into the firm in question thereby increasing the fee generating assets the firm advises.
Some of the largest financial asset management firms are BlackRock and PIMCO with ~3.5 trillion dollars and ~2.0 trillion dollars of AUM respectively.
Famous quotes containing the word management:
“This we take it is the grand characteristic of our age. By our skill in Mechanism, it has come to pass, that in the management of external things we excel all other ages; while in whatever respects the pure moral nature, in true dignity of soul and character, we are perhaps inferior to most civilised ages.”
—Thomas Carlyle (1795–1881)