Assets Under Management (AUM) represents the total market value of all investments that a fund manager, advisory firm, or financial institution manages on behalf of clients. In private markets, AUM includes both the current NAV of active fund investments and uncalled committed capital. AUM is the primary measure of a fund manager's scale and is often used to determine management fee calculations, regulatory registration thresholds, and institutional investor minimums.
AUM Calculation in Private Funds
Private fund AUM can be calculated differently depending on context: Regulatory AUM (for SEC registration) includes the value of all securities portfolios plus uncalled commitments. Fee-basis AUM may be calculated on committed capital (during the investment period) or invested capital (after the investment period), depending on the fund's terms. Reported AUM for marketing purposes typically includes all active fund vehicles managed by the firm.
Scaling Fund Operations with AUM Growth
As AUM grows, fund operations become exponentially more complex — more investors, more capital calls, more complex waterfalls, more reporting requirements. Fund administration platforms allow managers to scale operations without proportional increases in headcount by automating the workflows that multiply with AUM: investor onboarding, capital activity processing, NAV calculations, and LP reporting.