Very Simple question - AUM
Hi guys,
I'm very much confused with the definition of AUM.
Let's suppose a private equity raised $1B fund and it's the only fund that the company has. They have invested in $2B project using addtional $ 1B senior loan, but the control of the project belongs to the private equity. And.. after a few years, the asset had gained its value and became $3B( $2B in equity size, and $1B in debt).
In that case, what's the AUM ?
should I say the company has a AUM of $1B(initial equity investment size), $2B(initial project size), or $3B(value of the total project marked to market) ??
Thanks.
//www.wallstreetoasis.com/forums/pe-question
From the recent FAQ (and see my recent posts I just added, because the first page and a half of comments were all wrong).
The AUM will be $2B, because that's the current value of the private equity fund's investment.
The capital commitments to the fund are $1B (this is NOT the AUM, again, see my posts at the end of the thread linked to above). The total historical value of portfolio companies is $2B. The current value of portfolio companies is $3B. And AUM is $2B. All 4 of these numbers have been used in marketing materials and/or websites; but there actually is a correct definition for AUM and by it the AUM is $2B in your example.
Molestiae provident nisi harum provident est nobis. Aperiam blanditiis aut pariatur ut sint veritatis molestiae. Facilis id et quas voluptatem qui possimus. Dolor suscipit rerum nisi quo tenetur. Cumque ducimus nisi earum omnis. Velit aut nam reiciendis sit quisquam.
Ut natus necessitatibus molestias neque qui sed. Earum aut quam possimus sequi eum. Ullam quod corporis aut iure at ipsam. Odio necessitatibus debitis dolor libero.
Et est et maiores at corporis distinctio laudantium. Accusantium facere eum vel ullam doloremque est. Illo iure magni corporis aperiam illum laudantium libero. Rerum itaque dicta vero aut et laboriosam est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...