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21/05/2025

6 Questions Investors Should Ask About a Firm’s Assets Under Management

When evaluating potential investment managers, Assets Under Management (AUM) often takes center stage as a headline metric. While AUM provides valuable insight into a firm’s scale and reach, the raw number alone tells only part of the story. Savvy investors know that looking beyond the topline figure reveals much more about an investment firm’s capabilities, stability, and potential fit for their portfolios.

Before making allocation decisions, here are six essential questions investors should ask about a firm’s AUM – and why the answers matter more than you might think.

1. What’s the Composition of the AUM?

Perhaps the most fundamental question concerns what actually makes up a firm’s reported AUM figure. Different asset classes, investment vehicles, and client types create very different operational realities, even at identical AUM levels.

Key sub-questions include:

Which asset classes comprise the AUM? Are they concentrated in a single category or diversified across multiple investment types?
What’s the balance between fund structures and separate accounts? This composition affects everything from operational complexity to client service requirements.
How much AUM comes from the firm’s principals versus external clients? Substantial internal investment often signals confidence in the firm’s strategies.

This question has become more relevant as the asset management industry undergoes rapid transformation. PwC’s 2024 Asset and Wealth Management report states that global AUM is projected to reach $171 trillion by 2028 — with alternative investments alone expected to grow at a compound annual growth rate (CAGR) of 6.7% to reach $27.6 trillion. This diversification across asset classes, especially into less traditional and alternative spaces, reinforces the need for investors to look past headline AUM numbers to assess what those assets actually are.

Diversified alternative investment platforms like SWI Group demonstrate the importance of looking beyond simple AUM totals. Following the strategic integration of Icona Capital and Stoneweg under the SWI Group brand in March 2025, the firm operates across two distinct business lines: Stoneweg Real Assets and Icona Alternatives.

2. How Has the AUM Grown Over Time?

AUM growth trajectory often reveals more than the current total. Understanding how a firm has built its asset base provides valuable insights into both its historical success and future potential.

Investors should consider:

What’s the balance between organic growth and acquisitions? Both can be legitimate growth strategies, but they create different operational dynamics.
Has growth been steady or volatile? Consistent growth typically reflects both investment performance and client satisfaction.
How has the firm navigated market downturns? AUM resilience during challenging periods often indicates both investment discipline and strong client relationships.

Strategic acquisitions can accelerate AUM growth while enhancing capabilities. SWI Group’s €280 million acquisition of Cromwell Property Group’s European fund management platform, which added €3.9 billion in AUM, exemplifies how thoughtful expansion can complement organic growth. The key is understanding whether such transactions strengthen the firm’s core competencies or simply add scale without strategic benefit.

3. How Concentrated Is the Client Base?

AUM stability depends not just on total assets but also on their distribution across the client base. High concentration creates both operational and strategic vulnerabilities that sophisticated investors should evaluate carefully.

Think of client concentration like a ship’s cargo distribution – when weight is concentrated too heavily in one area, even small waves can capsize the vessel. Similarly, when too much AUM comes from just a few clients, even minor redemptions can create outsized disruptions.

Important considerations include:

What percentage of AUM comes from the top five or ten clients? High concentration increases redemption risk.
What’s the distribution across client types? Diverse client categories (institutional, high-net-worth, retail) often create more stable AUM through different market environments as these groups typically respond differently to market events.
What’s the average client tenure? Longer relationships typically indicate both satisfaction and stability.

For example, PwC’s 2023 Global Asset and Wealth Management Survey noted that the top ten asset managers are expected to control about half of global mutual fund assets by 2027, up from 42.5% in 2020 — reflecting an increasing concentration risk in the broader market. Client diversification, therefore, remains a crucial lens for evaluating resilience.

“Client diversification is as important as strategy diversification,” notes Max-Hervé George. “A broad client base across different investor types creates natural resilience against market-specific pressures that might affect particular investor categories.”

4. What Resources Support the AUM?

The operational infrastructure behind a firm’s AUM reveals much about its ability to manage assets effectively and scale appropriately. This includes everything from investment professionals to technology and support systems.

Investors should ask:

What’s the ratio of investment professionals to AUM? This indicates resource adequacy for proper asset management.
How is expertise distributed across the organization? Local knowledge often creates advantages in specific markets or asset classes.
What technology infrastructure supports the investment process? Sophisticated systems typically enhance both analysis and risk management.

According to PwC’s 2024 AWM Report, 81% of asset and wealth managers are planning to pursue strategic partnerships or M&A to strengthen operational and technological capabilities, and 80% believe AI will be a major revenue driver. This trend shows a growing emphasis on operational robustness as firms look to scale sustainably.

Firms with global presence often develop distinctive advantages in managing diversified AUM. With over 350 professionals across 26 offices in 18 countries, SWI Group has built an operational model that combines local expertise with global resources – a structure that supports both precise valuation work and the identification of new investment opportunities across markets.

As part of its evolving digital infrastructure strategy, SWI Group has also prioritized investments in the UK data center and logistics sectors. This move aligns with broader industry momentum toward AI-driven demand for scalable, resilient digital infrastructure — a sector increasingly viewed as a long-term growth engine in real asset portfolios.

5. How Liquid Are the Underlying Assets?

Asset liquidity fundamentally impacts a firm’s flexibility, risk profile, and ability to navigate market disruptions. Understanding the liquidity characteristics within a firm’s AUM provides crucial context for evaluating its stability and potential performance in different scenarios.

Key considerations include:

What percentage of AUM could be liquidated within different timeframes? This liquidity profile affects both risk management and opportunity capture.
How well matched are asset liquidity and fund redemption terms? Misalignment creates potential structural vulnerabilities – like promising same-day withdrawals for investments locked in five-year projects.
What mechanisms exist for valuing less liquid assets? Robust valuation processes are essential for accurate reporting and risk management.

The liquidity composition varies significantly across investment categories. Alternative investment platforms typically manage less liquid assets that require specialized valuation and risk management approaches. Understanding these dynamics provides important context for evaluating a firm’s capabilities relative to its AUM.

6. How Does AUM Align With the Firm’s Strategy?

Perhaps most importantly, investors should consider whether a firm’s current AUM aligns with its stated strategy and future directions. This alignment reveals much about both operational focus and potential performance outcomes.

Questions to consider include:

Is the current AUM optimal for the firm’s stated investment approach? Some strategies perform better at specific AUM levels.
Are there capacity constraints for particular strategies? Some investment approaches face diminishing returns as AUM grows.
Does the firm have infrastructure to support further AUM growth? Operational scalability affects both current execution and future potential.

For many alternative investment strategies, there’s an optimal AUM range that balances resource adequacy against market impact. Understanding where a firm sits within this spectrum provides valuable context for evaluating its potential fit within an investment portfolio.

“Finding the right balance between scale advantages and strategy integrity is crucial,” emphasizes Max-Hervé George. “Our approach of operating distinct investment platforms under a unified operational structure allows us to maintain strategy focus while benefiting from shared resources and expertise.”

This philosophy aligns with SWI Group’s recent expansion into sports and entertainment sectors, where Max-Hervé George’s strategic vision has brought together talents like Charles Leclerc and Andrés Iniesta to explore new opportunities, particularly in Middle Eastern markets such as the UAE and the broader GCC region.

In the evolving landscape of asset management, a nuanced understanding of Assets Under Management (AUM) is essential. The number itself is only a starting point. True insight comes from probing what that figure represents — how it’s composed, supported, distributed, and aligned with strategic direction. Armed with the right questions and a critical eye, investors can more confidently evaluate firms not just by their size, but by the strength of their foundations and the clarity of their future.