What does AUM for a debt fund consist of?
Is it just the money they have lended to borrowers or the total value of those assets (debt and equity)?
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So of its a debt fund there wouldn't be equity usually unless it's a debt and equity fund (more common in re development).
AUM would include both the money they have deployed as a debt, and also the money they have raised in the fund awaiting allocation to a deal as debt.
Sorry I meant does AUM include the total value of the assets they did the credit on, but your answer makes sense.
Basically all of the money they have out that is active plus dry powder.
Don't think the above poster is accurate. Whether you're at a debt fund or an equity fund, the AUM typically considered the equity you have in the fund itself, without factoring in leverage used in those transactions to boost returns. There isn't really a right answer, and you can play with semantics to quote AUM or total value of deals under management, etc. and it could vary.
If you're at a debt fund and raise $100mm from investors, then lever that up with a 65% debt facility on top to deploy out $285mm, you still technically only manage $100mm even though you have deployed $285mm.
Someone let me know if this is not your experience, but it's what I've heard if the "correct" way to quote AUM.
You are correct about the concept, but funds claim aum is debt + equity in my experience (total invested capital) - worked in pc and pe
common misconception is that private credit isn't highly levered - the concepts are the exact same, just different positioning in capital stack
Would agree my firm quotes Gross aum (with debt) and net aum(without debt(
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