Assets Under Management is a fairly common term when one approaches an investment firm or a company for the purpose of investing. What does it mean and why is it important? Strata Property Management Private Limited, Real Estate Investment Firms, Property Investment Firms, commercial real estate. Often when one hears about investment management companies, a term pops up – AUM. AUM is short for Assets Under Management. In the shortest explanation possible, it is the total market value of the investments that the company manages on behalf of its clients. By extension, even if a person manages investments of clients, their worth can also be estimated through assets under management. While the general rule of thumb is this, based on companies and organizations, the definition might vary slightly. Some calculations of AUM can include bank deposits, mutual funds, real estate owned, and cash in possession. While some other calculations limit the possessions to the funds/assets under discretionary management – where an investor assigns authority to a company or a person to manage or trade on their behalf.
AUM is just one of the aspects used in evaluating a company or an investment. When considering a company, along with AUM, management experience and performance are used in conjunction to estimate the worth of the entity. Realistically, investors consider higher investment inflows along with higher AUM comparisons as a measure of quality and management experience.