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Driehaus Capital Management Review

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Driehaus Capital Management, LLC

Driehaus Capital Management, LLC was established in the 1980s by Richard H. Driehaus. Driehaus has received a number of honors over the years, including some within the realms of philanthropy, art, business and finance. This has garnered him plenty of industry attention, leading to him being named in 2000 to Barron's "All-Century" team of people who've been most influential in the mutual fund industry.

With nearly $9 billion in assets under management (AUM), Driehaus Capital Management fully qualifies as a large financial advisor firm. The firm's financial advisors utilize active equity and alternative investment strategies, among others.

Driehaus Capital Management Background

Driehaus Capital Management was founded in 1982, but it wasn't until 1983 that it became a registered investment advisor (RIA). Today, it’s based in Chicago, and is owned by Driehaus Capital Holdings, which is in turn owned by Richard Driehaus.

The firm employs nearly 100 total employees, including more than 30 investment experts. Driehaus Capital Management also manages proprietary mutual funds.

Driehaus Capital Management Client Types and Minimum Account Sizes

Driehaus Capital Management serves the following types of clients:

  • Corporate and public pension plans
  • Endowments and foundations
  • Government entities
  • Insurance companies
  • Single and multi-family offices
  • Driehaus mutual funds
  • Pooled investment vehicles
  • High-net-worth individuals

Minimum account sizes required by Driehaus Capital Management for portfolio advisory services vary. These typically depend on factors such as asset classes and investment strategies.

  • Separately Managed Accounts
    • U.S. Equity Strategies (except the Life Sciences Strategy): $1,000,000
    • Life Sciences Strategy and all ex-U.S. Strategies: $20,000,000
    • Emerging Markets Strategy: $5,000,000
  • Driehaus Mutual Funds
    • Driehaus Micro Cap Growth Fund, Driehaus Small Cap Growth Fund Investor Class, Driehaus Small/Mid Cap Growth Fund, Driehaus International Small Cap Growth Fund, Driehaus Emerging Markets Growth Fund – Investor Class, Driehaus Emerging Markets Small Cap Growth Fund, Driehaus Event Driven Fund and Driehaus Emerging Markets Opportunities Fund: $10,000
    • Driehaus Active Income Fund: $25,000
    • Driehaus Small Cap Growth Fund – Institutional Class and Driehaus Emerging Markets Growth Fund – Institutional Class: $500,000

Services Offered by Driehaus Capital Management

Driehaus Capital Management specializes in portfolio management services. It provides access to separately managed accounts (SMAs), proprietary mutual funds, collective investment trusts (CITs), affiliated pooled accounts and model portfolio programs. 

Depending on factors like the client’s risk tolerance and investment goals, the firm may utilize the following investment strategies to meet those objectives:

  • Active equity
  • Multi-asset
  • Alternative investments

Driehaus Capital Management Investment Philosophy

Driehaus Capital Management employs a few different investment strategies. We describe these below, along with the philosophy that drives each.

  • Growth Equity: Based on the belief that markets tend to misprice stocks of firms undergoing positive growth inflections and these inefficiencies can follow predictable and thus exploitable patterns, this strategy aims for maximum capital appreciation during a full market cycle from three to five years.
  • Alternative Emerging Markets: Taking an approach similar to that of the equity-driven strategies, this strategy aims for superior risk-adjusted returns but allows exposure to other asset classes.
  • Alternative Credit: Based on the view that strong returns with modest volatility can be captured in the credit markets by employing a combination of sophisticated hedging and arbitrage investment techniques, this strategy seeks volatility-managed absolute returns in varying interest rate environments.
  • Alternative Event Driven: Driven by the notion that strong event-driven investments can be found in the global credit and equity markets, this strategy seeks superior risk-adjusted returns with lower correlations to major asset classes and lower volatility than the S&P 500 Index.

Fees Under Driehaus Capital Management

Fees required by Driehaus Capital Management vary, depending on factors such as account type as well as investment strategy and asset classes involved. Here's a more detailed breakdown:

Separately Managed Account Fees
Strategy Fee Rate
Micro Cap Growth Strategy Accounts  1.25% per annum
Small Cap Growth Strategy Accounts 0.60% per annum 
Small/Mid Cap Growth Strategy Accounts   0.60% per annum 
Life Sciences Strategy Accounts 1.25% per annum plus an annual performance fee of 17.5%
International Small Cap Growth Strategy Accounts  1.00% per annum
Emerging Markets Growth Strategy Accounts 0.90% per annum  
Emerging Markets Small Cap Equity Strategy Accounts 1.00% per annum
Emerging Markets Opportunities Strategy Accounts 1.00% per annum 

 

Mutual Fund Fees
Fund Fee Rate
Driehaus Micro Cap Growth Fund 1.25% of average daily net assets  
Driehaus Small Cap Growth Fund 0.60% of average daily net assets
Driehaus Small/Mid Cap Growth Fund 0.60% of average daily net assets
Driehaus International Small Cap Growth Fund 1.00% of average daily net assets
Driehaus Emerging Markets Growth Fund 1.05% of average daily net assets up to $1.5 billion and 0.75% of average daily net assets in excess of $1.5 billion
Driehaus Emerging Markets Small Cap Growth Fund  1.15% of average daily net assets
Driehaus Active Income Fund 0.55% of average daily net assets
Driehaus Event Driven Fund 1.00% of average daily net assets
Driehaus Emerging Markets Opportunities Fund 0.90% of average daily net assets

 

Collective Investment Trust Fees
Strategy Fee Rate
Driehaus Emerging Markets Growth strategy 0.90% per annum of the net asset value of the account
Driehaus International Small Cap Growth strategy 1.00% per annum of the net asset value of the account

Additionally, Driehaus Capital Management offers access to affiliated pooled accounts to accredited investors. The firm currently offers two of these accounts: the Life Sciences strategy and the Driehaus Emerging Markets strategy. The fee for the former is 1.25% of the account’s net asset value, plus an annual incentive allocation of 17.5%. For the latter strategy, the annual fee is 0.90% of the net asset value of the account.

In some cases, Driehaus Capital Management may charge performance-based fees. In such scenarios, fees may rise if the investment performs well according to agreed upon terms. The firm would disclose information related to performance-based fees as it applies to the specific client involved.

What to Watch Out For

According to its Securities and Exchange Commission (SEC)-filed Form ADV, neither Driehaus Capital Management, nor its managing persons, have undergone any disciplinary or legal action.

Opening an Account With Driehaus Capital Management

You can contact Driehaus Capital Management by visiting its website or calling (312) 587-3800. You can find the firm's office at 25 East Erie Street in Chicago.

All information was accurate as of the writing of this article.

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How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research