Columbus, Ohio-based Diamond Hill Capital Management, Inc. solely provides investment management services to a variety of individual and institutional clients. Diamond Hill is an investment management firm with nearly 50 financial advisors on its staff.
This team is collectively responsible for over $23.3 billion in client assets under management (AUM). The firm has a wide range of investing strategies that focus on various securities-based mutual funds.
A fee-only firm, Diamond Hill earns all of its compensation from charges that clients pay. This differs from a fee-based structure, in which a firm would earn compensation from both client fees and outside sources such as insurance commissions.
Diamond Hill Capital Management Background
Diamond Hill Capital Management has been around since 2000, though the firm’s predecessor company, Banc Stock Group, was founded in 1988. The firm is owned by a combination of its employees and outside investors, with the former claiming 18% of the overall shares and the latter holding the remaining 82%.
Diamond Hill’s team boasts an impressive 47 chartered financial analyst (CFA) designations; this is a certification commonly seen at investment advisory firms, but it's rare to see so many of a firm's advisors hold the certification. There are also six certified public accountants (CPAs), six certified investment management analysts (CIMAs), five advisors with a certificate in investment performance measurement (CIPM) and two chartered alternative investment analysts (CAIAs). All in all, this is a very well-qualified group of advisors.
Diamond Hill Capital Management Client Types and Minimum Account Sizes
With nearly 3,000 clients to its name, Diamond Hill Capital Management works with a wide variety of client types. While other investment advisors make up the largest percentage of its client base, the firm also maintains relationships with a handful of individuals (both with and without a high net worth), retirement plans, charitable organizations, investment companies, businesses, insurance companies, government entities and pooled investment vehicles.
Diamond Hill Capital Management Minimum Account Size
There is no standard minimum initial investment at Diamond Hill Capital Management. Instead, the firm requires different amounts for each investment strategy.
For its small-cap, small-mid-cap, mid-cap, large-cap, large-cap concentrated, international, all-cap select and global strategies, the minimum is $10 million. A $25 million minimum is necessary for the firm’s corporate credit and high-yield strategies. But the core bond strategy comes with a minimum account size requirement of $50 million. Lastly, the short duration total return strategy calls for a $200 million minimum investment.
Services Offered by Diamond Hill Capital Management
Diamond Hill Capital Management’s services are based solely around investment portfolio management. The firm offers nearly a dozen separate investing strategies that are chosen based on each client’s needs.
Some of the aforementioned strategies are provided to third-party wrap fee program sponsors and unified managed account (UMA) programs. Through these services, the firm gives access to its strategies so its investment advisor clients can then offer them to their own clients.
Diamond Hill Capital Management Investment Philosophy
At the highest level, Diamond Hill Capital Management has nine equity strategies and four fixed-income security strategies. For each of these, the firm adheres to strict rules and philosophies in an attempt to garner long-term success.
- Treat every investment as a partial ownership interest in that company.
- Always invest with a margin of safety.
- Possess a long-term investment temperament.
- Recognize that market price and intrinsic value tend to converge over a reasonable period of time.
As you might imagine, in order to accommodate its extensive strategies, the firm is open to investing in many different types of securities. These include U.S. and international common stocks, real estate investment trusts (REITs), preferred stocks, investment grade and non-investment grade corporate bonds, U.S. government securities, foreign debt securities, hedge funds, exchange-traded funds (ETFs) and more.
Diamond Hill Capital Management Fees
Like its minimums, the fee schedule at Diamond Hill Capital Management is dependent upon the investment strategy your account utilizes. For the firm’s equity strategies, annual fees range from 0.50% to 0.90% of your AUM. For fixed-income strategies, rates vary from 0.18% to 0.60%. In some cases, fees are negotiable.
Diamond Hill’s fees are due on a quarterly basis, in arrears. You will be charged based on the value of your account’s assets on the last business day of the quarter. If you do not elect to have fees deducted directly from your account, the firm will bill you via an invoice.
|*Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount. Fee amounts are based on the 0.90% fee for Small Cap strategies.|
|Estimated Investment Management Fees at Diamond Hill Capital Management*|
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What to Watch Out For
Diamond Hill Capital Management’s legal and regulatory record is clean in the eyes of the U.S. Securities and Exchange Commission (SEC). But there are no financial planning services, like retirement planning or estate planning, available through Diamond Hill Capital Management. If financial planning is something you’re looking for, try our financial advisor matching tool to find appropriate options in your area.
In certain situations, Diamond Hill Capital Management may receive performance-based fees from clients. According to the firm’s Form ADV, this means it “can potentially receive higher fees from accounts with a performance-based compensation structure than from those accounts that pay a fixed asset-based fee.” Although this represents a potential conflict of interest, the firm is bound by fiduciary duty to act in clients’ best interests at all times.
Opening an Account With Diamond Hill Capital Management
The easiest way to become a client of Diamond Hill Capital Management is to either call the firm at (614) 255-3333 or email its team at firstname.lastname@example.org. If you’d rather have an advisor reach out to you, the firm offers a contact form on its website that asks for your first and last name, email address, a phone number and a brief message.
All information is accurate as of the writing of this article.
Tips for Your Investment Portfolio
- Before you invest your hard-earned money in the market, a financial advisor might be worth looking into. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- Don't forget that investing gains outside of a tax-advantaged retirement account are subject to taxation. If you’re unsure what your tax bill might look like, try SmartAsset’s capital gains tax calculator.