Definition of Assets Under Management (AUM)

What are assets under management? What is the definition of the term assets under management? What does AUM mean?

Assets under management (or AUM) refers to the total value of the assets that a person such as a hedge fund manager or mutual fund manages.

Assets under management obviously refers to the total market value of the assets under management.

Assets under management includes:

a) investor capital
b) capital that belongs to the principals of the management firm

So, if a hedge fund manager has $3 billion of his own capital in the fund, then this amount is also included in the assets under management total.

So, next time you hear that a hedge fund firm has "$13 billion AUM" - this means that they currently have $13 billion in assets under management.

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