Assets Under Management

Assets Under Management (AUM) can refer to securities, cash, real estate, a loan portfolio, or other types of assets that are commonly managed by an asset management company.

While assets under management are not part of a company's assets and do not appear on a company's balance sheet, they are very significant for many reasons including:

• They tend to generate reliable long-term income and higher sales prices,

• They generally instill confidence in future clients, and

• They provide the asset management company with leverage in its banking relationships making it relatively easy to borrow funds at low rates on attractive terms.

In addition to other types of asset managers, property management companies control large portfolios of real estate and cash balances that provide significant benefits to the management company.

 

 

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Off Balance Sheet Assets and Liabilities

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