Assets Under Management
Assets under management (AUM), or capital, is the total value of an investment fund to investors. This is equal to capital contributed by investors plus retained net profits (gross profits minus fees).
For traditional investment funds, such as long-only mutual funds, the assets under management and the total exposure of the instruments owned by the fund are usually very similar. For example, if a traditional equity mutual fund has $100 million of AUM, it will usually own approximately $100 million of equities (in practice, the fund will have some uninvested cash, so the amount available to invest in equities will be slightly less than $100 million).
For hedge funds, which can employ leverage, the value of securities controlled by the fund may be significantly higher than the fund’s AUM.