how large is a 400 million aum firm

What Does $400 Million in Assets Under Management Mean?

Having $400 million in assets under management (AUM) means that clients have entrusted a total of approximately $400 million to an institution for management. This figure reflects the total client assets overseen, not the company’s proprietary funds or net assets. The size of AUM impacts fee models, organizational scale, and regulatory thresholds.

AUM typically includes cash, stocks, bonds, fund shares, and crypto assets—essentially any assets managed under contract, with net asset value calculated and fees charged accordingly. Companies may disclose “total AUM,” “post-fee AUM,” or “strategy-specific AUM,” so always refer to the specific disclosure definitions.

In both traditional and crypto finance, AUM highlights “who is managing assets on behalf of whom.” Unlike metrics such as market capitalization or TVL, AUM serves as a “managed asset pool” directly tied to management fees and client relationships.

How Large Is a Company With $400 Million in AUM?

A company with $400 million in AUM is generally considered a small to mid-sized asset management firm—not a micro startup, but not yet a large-scale institutional player. Such firms typically operate with lean teams supplemented by outsourcing and service providers.

Team size varies by strategy complexity and compliance requirements, but commonly includes 20–60 full-time employees: 10–20 in investment research and portfolio management, 5–10 in trading and operations, 3–8 in risk and compliance, 2–6 in client relations and sales, and 3–8 in IT for quant or crypto strategies. Firms focusing on fund-of-funds or passive strategies may operate with even leaner teams.

Physical and technical infrastructure usually covers trading and risk management systems, compliance documentation systems, custody and audit interfaces, and API trading frameworks. For crypto assets, additional requirements include hot/cold wallet management, key and access controls, and on-chain data monitoring.

How Do Companies With $400 Million in AUM Generate Revenue?

Firms managing $400 million typically employ a “management fee + performance fee” model. The management fee is a fixed percentage of AUM, while the performance fee is a share of profits when returns exceed a benchmark.

A common structure is “2% + 20%” (industry standard, specific terms may vary):

• Management Fee: 2% annually; $400 million × 2% = $8 million/year to cover personnel and operating expenses.
• Performance Fee: If annual return is 10%, profit is $40 million; at 20%, the performance fee is $8 million. Poor market performance may result in zero performance fees, subject to “high-water mark” clauses.

Revenue fluctuates based on market movements, redemptions/subscriptions, and contractual terms. Passive management or customized institutional accounts often incur lower fees; high-value-add strategies (like multi-strategy quant or private equity) may use different fixed and incentive structures.

What Team Structure Is Needed for Managing $400 Million in AUM?

Asset managers with $400 million in AUM typically coordinate six core functions: investment research, trading, risk management, compliance, operations/custody, and client relations. Team scale adapts to strategy complexity.

• Investment Research & Portfolio Management: Responsible for strategy development, fundamental research, asset allocation, and portfolio construction. Quantitative and crypto strategies require data engineering, model development, and backtesting.
• Trading & Execution: Executes trades across markets and asset classes, maintaining relationships with brokers, market makers, and exchanges—such as opening institutional accounts on Gate, integrating API trading, and utilizing stablecoin rails for efficient settlement.
• Risk Management & Compliance: Sets limits, stop-losses, counterparty onboarding; maintains KYC/AML procedures and reporting; monitors anomalies and exposure deviations.
• Operations & Custody: Handles NAV calculation, reconciliation, audits, and fee computation; interfaces with custodians, auditors, legal counsel; manages multi-signature wallets and hierarchical permissions for crypto holdings.
• Client Relations & Sales: Manages fundraising from institutions/high-net-worth individuals (HNWI), roadshows, disclosures, regular communication, and compliance updates.

How Does $400 Million in AUM Compare to Crypto Industry TVL?

$400 million in AUM refers to “assets managed on behalf of clients,” while TVL (Total Value Locked) reflects “assets locked within a protocol.” The two metrics measure different concepts and are not directly interchangeable.

TVL measures the value of assets locked in a decentralized protocol—typically used as an indicator of the scale of funds attracted by DeFi protocols. TVL does not specify who manages these assets or how fees are charged. AUM emphasizes the management relationship and is usually tied to management and performance fees.

For comparison: a company with $400 million AUM might hold only a small amount on-chain but operates across various asset classes. In contrast, a protocol with $400 million TVL may focus solely on lending or market-making. When comparing “scale,” clarify whether you are assessing “entrusted management capability (AUM)” or “protocol reliance (TVL).”

What Are the Operating Costs and Compliance Requirements for $400 Million AUM?

Operating costs include staffing, systems, compliance, and outsourced services. Compliance obligations vary by jurisdiction but generally increase with scale.

Personnel and systems contribute to fixed costs—salaries, office expenses, IT systems (OMS/EMS), risk tools, data feeds, on-chain analytics—while variable costs come from trading expenses, custody, and audit fees.

From a regulatory standpoint (for example, in the US), as of 2025, investment advisors managing over approximately $110 million typically must register with the SEC (subject to rule changes). Europe and Asia have their own thresholds and reporting requirements. Common obligations include KYC/AML procedures, annual audits, regular regulatory filings, appointment of compliance officers, disaster recovery plans, and cybersecurity protocols.

For crypto assets specifically: requirements extend to custody licensing, private key management, whitelisting on-chain addresses, stablecoin/fiat gateway compliance, and due diligence with exchanges’ institutional onboarding/risk controls.

Where Does a $400 Million AUM Firm Sit in the Market?

A firm managing $400 million is often positioned as a “boutique” or “specialized niche” asset manager: large enough to support compliance and research investment while retaining agility in strategy development and decision-making.

Client bases typically include HNWIs, family offices, select small institutions, and corporate treasuries. With stable performance records and robust risk controls, such firms may also attract allocations from fund-of-funds or regional institutional investors. In crypto-focused segments, managers might start with select strategies before expanding into multi-strategy or multi-asset mandates.

In peer comparisons: $400 million is mid-sized versus trillion-dollar giants like sovereign wealth funds but significantly more mature than sub-$50 million startup funds—offering more developed processes, systems, and audit credibility.

How Does a $400 Million AUM Company Execute Investments?

Investment execution at this scale follows standardized procedures to minimize operational and compliance risks:

1. Client Onboarding & Product Setup: Prepare offering documents, design terms, complete KYC/AML checks for eligible investors; open custody/bank accounts; set up compliant crypto custody/multi-signature structures if needed.
2. Asset Allocation Decisions: Investment committee sets risk budgets and return targets; allocates among equities, bonds, commodities, crypto assets, cash, hedging tools.
3. Trade Routing & Execution: Place orders via brokers, market makers, exchanges; for crypto assets—open institutional accounts on Gate exchange, enable APIs/risk parameters; use stablecoins for settlement to optimize costs/slippage.
4. Settlement & Custody Integration: Reconcile with custodians (traditional or on-chain), calculate NAVs; ensure withdrawals/fees/distributions are compliant and transparent.
5. Risk Monitoring & Reporting: Monitor exposures, volatility, liquidity risks in real time; produce weekly/monthly reports and flag anomalies.
6. Auditing & Review: Annual financial/process audits; review strategy/risk events; update limits/procedures for ongoing compliance improvements.

What Risks Does a $400 Million AUM Firm Face?

Key risks include market volatility, liquidity constraints, counterparty failures, operational errors, compliance breaches, and reputational damage. While not large enough to diversify away all risks effortlessly, firms at this size can implement systematic risk controls.

• Market & Liquidity: Single-strategy drawdowns may trigger client redemptions; trading small-cap or illiquid assets incurs higher impact costs. Position limits and liquidity buffers are essential.
• Counterparty & Custody: Risks from brokers/exchanges/custodians require due diligence, exposure limits, backup arrangements; crypto assets demand robust private key/address security.
• Operational & Compliance: Trade errors, privilege misuse, reporting lapses can prompt regulatory action. Three lines of defense plus audit trails are necessary.
• Reputation & Client Relations: Performance swings or poor transparency can accelerate withdrawals. Clear disclosure policies and regular client communications help mitigate this risk.

How Big Is $400 Million in AUM Really?

$400 million in AUM represents a mature small-to-mid-sized asset management firm—capable of maintaining robust compliance/audit systems; staffed with professional research and risk teams; able to interface smoothly with exchanges, brokers, custodians. Typical management fees can cover operational costs; performance fees are market-dependent. Unlike TVL in the crypto sector—which reflects value locked—AUM emphasizes fiduciary relationships tied to fee structures. To gauge how “big” this is in context, consider fee schedules, team expertise, compliance standards, client base composition, strategy complexity—and always remain vigilant regarding capital and regulatory risks.

FAQ

Where does a company managing $400 million in AUM rank globally?

A company with $400 million in AUM ranks approximately between 500th–1000th among global asset managers by size. In comparison to industry giants like BlackRock (managing over $10 trillion), these firms are smaller but still possess professional operational capabilities and market influence. They typically focus on specialized sectors or regions with lean investment teams and stable client bases.

How much can an asset manager with $400 million AUM earn annually?

Using standard industry management fee rates of 1–2%, such firms can generate $4–8 million per year in management fees. Additional performance fees—typically around 20% of profits—may apply if returns are strong. After deducting staff compensation, office expenses, compliance/audit costs etc., net profit margins typically range from 20–30%.

How many employees does a $400 million AUM firm require?

Usually between 30–50 full-time staff. The investment team (8–15 people) handles security selection and portfolio decisions; back/middle office (20–30 people) manage compliance/risk control/operations/client service. Assets managed per employee typically range from $8–13 million—balancing investment quality with cost efficiency. Team sizes can vary by strategy—quant funds may operate with fewer staff.

How long does it take to grow from $100 million to $400 million AUM?

In stable market conditions it generally takes 3–5 years. Growth requires both strong investment performance (to attract new clients) and net inflows (subscriptions). With annual returns around 20% and net inflow growth of 30% per year, quadrupling AUM can be achieved within 4–5 years. Bear markets slow growth; strong bull markets accelerate it.

What distinguishes a $400M AUM firm from a $1B AUM firm?

The main differences lie in product diversity and client base composition. Firms with $1 billion AUM typically offer 3–5 product lines serving both institutions and HNWIs; those at $400 million often focus on 1–2 products. Larger firms also find it easier to register with the SEC as regulated advisors—winning greater trust from institutional clients. However, smaller firms retain more flexibility in management decisions and can respond more quickly to market changes.