Diamond Hill Investment Group Profile
Diamond Hill Investment Group, Inc., through its wholly owned subsidiary, Diamond Hill Capital Management, Inc. (DHCM), provides investment advisory and fund administration services.
DHCM is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the Advisers Act), and is the investment adviser and administrator for the Diamond Hill Funds (each a Fund, and collectively, the Funds), a series of open-end mutual funds. The company provides investment advisory and related services to the Diamond Hill Micro Cap Fund, LP (DHMF), a private fund, as well as, separately managed accounts, collective investment trusts, model delivery programs and other pooled vehicles, including sub-advised funds.
The company accomplishes this through its shared investment principles, including valuation-disciplined active portfolio management; fundamental bottom-up research; a long-term, business-owner mindset; and a client alignment philosophy that ensures clients’ interests come first. The company’s core cultural values of curiosity, ownership, trust, and respect create an environment where investment professionals focus on investment results and all teammates focus on the overall client experience.
The company offers a variety of investment strategies designed for long-term strategic allocations from institutionally-oriented investors in key asset classes, aligning its investment team’s competitive advantages with its clients’ needs.
Assets Under Management
The company’s principal source of revenue is investment advisory fee income earned from managing client accounts under investment advisory and sub-advisory agreements. The company also has certain agreements that allow it to earn performance-based fees if investment returns exceed targeted amounts over a specified measurement period.
Model Delivery Programs - Assets Under Advisement
The company provides strategy-specific model portfolios to sponsors of model delivery programs. The company is paid for its services by the program sponsors at a pre-determined rate based on assets under advisement (AUA) in the model delivery programs.
Capacity
The Company’s ability to retain and grow its AUM has been, and will continue to be, primarily driven by delivering attractive long-term investment results, which requires strict adherence to capacity discipline. As of December 31, 2022, the company’s Large Cap and Small-Mid Cap strategies were closed to most new investors. The company plans to reopen its Large Cap strategy on February 28, 2023. The company’s firm level capacity increases with the development of new products or strategies.
Distribution Channels
The company offers a variety of investment strategies designed for long-term strategic allocations from institutionally-oriented investors in key asset classes, aligning its investment team’s competitive advantages with its clients’ needs.
Fund Administration Activities
The company provides fund administration services to the Funds. Fund administration services are broadly defined to include the following services: portfolio and regulatory compliance; treasury and financial oversight; oversight of back-office service providers, such as the custodian, fund accountant, and transfer agent; and general business management and governance of the Funds.
Growth Strategy
The company’s growth strategy centers first and foremost on delivering an investment and client experience that enables investors to experience better outcomes over the long-term. The company focuses its efforts primarily on asset allocators with centralized research teams, allowing efficient delivery of services to a larger and more diverse client base.
Regulation
DHCM is registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940, as amended (Advisers Act) and operates in a highly regulated environment. The Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, recordkeeping requirements, operational requirements, and disclosure obligations. All of the Funds are registered with the SEC under the Investment Company Act of 1940, as amended (the 1940 Act), and are required to make notice filings with all states where the Funds are offered for sale. Virtually all aspects of DHCM’s investment advisory and fund administration business are subject to various federal and state laws and regulations.
DHCM is a fiduciary under the Employee Retirement Income Security Act of 1974, as amended (ERISA), with respect to benefit plan clients, and therefore, is subject to ERISA regulations. DHCM’s trading activities for client accounts are regulated by the SEC under the Securities Exchange Act of 1934, as amended (Exchange Act), which includes regulations governing trading on inside information, market manipulation, and a broad number of trading and market regulation requirements in the United States (e.g., volume limitations and reporting obligations).
History
Diamond Hill Investment Group, Inc., an Ohio corporation, was founded in 1990.
