Module II· Multiples & Sector SpecificsIntermediate
Question
How do you use P/AUM in asset-manager valuations?
Answer
Mechanics
P/AUM = market cap / assets under management — the value per dollar of managed assets.
Logic
Asset managers generate fees as a % of AUM, so AUM is the primary value driver.
Rule-of-thumb range
- Active managers: 1–3% of AUM (fee margins of 50–80bps).
- Passive (ETFs): 0.3–0.8% (lower fees, but scale advantages).
Examples
large listed active managers trade around 1.5–2% of AUM, while private banks that combine asset and wealth management run at 3–5%.
Drivers
fee margins × profit conversion. Mix effect: a higher passive share pushes multiples down.
Deep diveShow more details
Pitch tip
In asset-management deals, always separate active vs. passive AUM and retail vs. institutional — the multiple differences run 2–3x.