1
$\begingroup$

Could you help me to understand the connection between assets under management and net worth? In my understanding, if a corporation has $X$ dollars Assets Under Management, and if a shareholder owns $Y\%$ of that corporation, then this contributes $\frac{X\cdot Y}{100}$ dollars to the net worth of the shareholder.

However, on the Wikipedia page of Fidelity Investments I see that this corporation has AUM more than $4$ trillion dollars. At the Wikipedia page of Abigail Johnson, it says that she owns approximately $24.5\%$ of the corporaton. So this would contribute 1 trillion dollars to her net worth. But the same Wikipedia page states that her net worth is only $25.8$ billion dollars.

So clearly I have some misunderstanding. Could you help me to understand the connection between AUM and net worth, and how it relates to this example?

$\endgroup$

1 Answer 1

4
$\begingroup$

Fidelity Investments is a corporation which manages investments on behalf of clients. It does not own "its" assets under management. Those assets belong to its clients.

In order to manage its clients' assets, it will have some assets of its own, eg offices and computer systems. But the total value of the assets it owns will be a tiny proportion of the total value of its assets under management.

It would be a fallacy therefore to apply the estimated 24.5% owned by Abigail Johnson to the total of assets under management.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.