Capital Under Management (AUM)
Also known as AUM, Assets Under Management
Capital under management (AUM) is the total committed or fair-value capital a firm manages across all its funds. The same firm can quote different AUM figures depending on whether it counts committed capital, called capital, or current fair value, so the basis of the number matters as much as the number itself.
Formula
AUM = Σ (Committed Capital_i) OR AUM = Σ (NAV_i + Uncalled Commitment_i)- Committed Capital_i
- Total LP commitments to fund i, including the GP commitment
- NAV_i
- Current fair-market value of fund i's portfolio
- Uncalled Commitment_i
- Capital still available to call from LPs in fund i
In depth
AUM looks like a single number and is anything but. A VC firm can quote three different AUM figures for the same balance sheet on the same day, all defensible. Committed AUM counts every dollar LPs have promised across all funds. Fair-value AUM marks the live portfolio to current valuations. Invested AUM is the cost basis of deployed positions. Regulators in most jurisdictions also define their own variant for registration and reporting purposes, typically a fair-value-plus-uncalled-commitments basis.
The variation matters because compensation and regulation follow specific definitions. Management fees usually compute against committed capital during the investment period and net invested capital thereafter, not against fair-value AUM. Registration thresholds and disclosure regimes are tied to the regulator's defined AUM measure, which differs by jurisdiction. Marketing decks tend to lead with the headline that flatters most, which is usually committed AUM.
Why it matters
A $1B AUM firm is not necessarily a $1B-deployed firm. The number can include uncalled dry powder, marked-up but unrealised positions, separately managed accounts, and SPV vehicles. LPs underwriting a new commitment dig into the composition to understand how much capital the team is actively managing today versus carrying as paper or pre-deployment commitments. Regulators care about their own defined cut because it determines who must register and what disclosure regime applies.
Worked example
Acme Ventures, three active funds:
| Fund | Vintage | Committed | Called | Current NAV | Uncalled |
|---|---|---|---|---|---|
| Fund I | 2018 | $50M | $48M | $120M | $2M |
| Fund II | 2021 | $150M | $90M | $130M | $60M |
| Fund III | 2024 | $250M | $40M | $42M | $210M |
| Total | $450M | $178M | $292M | $272M |
Committed AUM: $450M. Fair value plus uncalled commitments: $292M + $272M = $564M. Invested (called) capital: $178M. Three different but legitimate AUM figures for the same firm, used in different contexts: marketing, regulatory filings, and LP analytics.
Frequently asked
What is the difference between committed and invested AUM?
Committed AUM is total LP commitments across all funds, regardless of whether capital has been called. Invested AUM is the cost basis of capital actually deployed. A firm with three $100M funds has $300M committed AUM, but its invested AUM could be anything from $50M to $300M depending on deployment stage.
How is regulatory AUM different from marketing AUM?
Most jurisdictions require fund managers to report an AUM figure to their financial regulator on a standardised basis, often fair-market value plus uncalled commitments. The regulatory number is defined by the local rulebook and is comparable across managers in that jurisdiction. Marketing AUM is whatever number the firm chooses to lead with, and is usually committed capital because it produces the largest figure. Always check the basis before comparing two firms.
Why does AUM matter for a VC firm?
AUM drives management fee revenue (a percentage of committed or invested capital), team scale, fund-of-funds eligibility (some LPs require a minimum AUM), and reputational signalling. It can also drive regulatory registration thresholds, which vary by jurisdiction.
Does dry powder count toward AUM?
Yes, for committed AUM and for most regulatory AUM definitions, because the manager has the legal right to call that capital. Some marketing AUM numbers exclude dry powder; LPs read these carefully because the distinction can double or halve the headline figure.
How does AUM change over a fund's life?
Committed AUM is set at final close and stays fixed. Fair-value AUM rises with markups and exits, then falls as distributions return capital to LPs. By the end of a fund's harvest period, fair-value AUM for that fund approaches zero, and the firm's headline AUM depends on newer vintages.