Assets Under Management (AUM)
Assets Under Management (AUM) represents the total market value of investments that a family office manages on behalf of clients.
Components of AUM:
- Liquid investments (stocks, bonds, mutual funds)
- Alternative investments (private equity, hedge funds, real estate)
- Direct investments and operating businesses
- Art, collectibles, and other tangible assets
AUM Significance:
- Primary metric for family office size and capability
- Basis for management fee calculations
- Indicator of investment expertise and resources
- Benchmark for operational efficiency
Industry Benchmarks:
- Small family offices: $100 million - $1 billion AUM
- Mid-size family offices: $1-5 billion AUM
- Large family offices: $5+ billion AUM
AUM Growth Factors:
- Market appreciation of existing investments
- Additional family wealth creation
- New client acquisition (for multi-family offices)
- Successful investment performance
AUM is the foundation metric that determines a family office's business model, fee structure, and service capabilities.
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