Glossary
Returns and fees
What is AUM?
Assets under management.
The base that fees are charged on, and therefore the number the platform is actually run for. Growing it is something you choose to do. It doesn't just happen.
A worked example
A fund with $2bn of AUM charging a 1.5% management fee earns $30m a year before it makes a single good investment. That's why raising the next fund can matter more to a manager than how the last one did.
Where it catches you in the game
- AUM feeds your score and gates the later ranks.
It comes up most on the hedge fund desk, the asset management desk and the quantitative investing desk.
Related terms
Learn it by using it
Definitions stick once they've cost you money. Take a seat, make three calls a year and watch what AUM does to your returns.