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Luther King Capital Management Review

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Luther King Capital Management Corporation

Based in Fort Worth, Texas, Luther King Capital Management takes its name from its founder John Luther King, Jr. With offices also in San Antonio, Austin and Dallas, the firm employs 50 advisors and manages more than $18 billion in assets.

The firm manages portfolios for individuals, trusts, estates, charitable organizations, government entities, corporations and other business entities, foundations, endowments and pension and profit-sharing plans. It also serves as an advisor to LKCM mutual funds, sub-advised portfolios, affiliated private investment partnerships, single-investment partnerships, model portfolio programs and wrap fee programs.

Luther King Capital Management Background

After managing assets for a mutual fund company and investment firm, King opened his own investment advisory in 1979. He started with a two-person office with a combined 17 years of investment experience. Today, the firm employs 85 people, 50 of whom are advisors, with a combined 1,196 years of investment experience.

King owns and controls a majority interest in parent company Southwest JLK Corporation. Other employees have small stakes.

What Types of Clients Does Luther King Capital Management Accept?

Luther King Capital serves individuals, trusts, estates, charitable organizations, government entities, corporations and other business entities, foundations, endowments, pension and profit-sharing plans, registered investment companies and private investment partnerships. Clients who have separately managed accounts have high net worth, as the minimum investment starts at $2,000,000.

Luther King Capital Management Minimum Account Sizes

The firm generally requires a minimum $2,000,000 or $3,000,000 investment for a separately managed account, depending on the strategy. For its mutual funds, the minimum is $2,000, and for investment partnerships, the minimum ranges from $250,000 to $1,000,000, depending on the strategy. That said, the firm may waive or negotiate terms at its discretion. 

Services Offered by Luther King Capital Management

As noted earlier, Luther King Capital advises and oversees separately managed investment accounts, mutual funds, sub-advised portfolios, affiliated private investment partnerships, single-investment partnerships, model portfolio programs and wrap fee programs - all on a discretionary basis.

The firm also offers investment consulting on a non-discretionary basis.

Luther King Capital Management Investing Philosophy

Through separately managed accounts, Luther King Capital offers:

  • Equity strategy - which generally holds equity securities of approximately 40 to 65 companies with market capitalizations of at least $1 billion at the initial time of purchase 
  • Small cap strategy - which generally holds equity securities of approximately 75 to 95 companies with market capitalizations between $600 million and $5 billion at the initial time of purchase 
  • Small-mid cap strategy - which generally holds equity securities of approximately 50 to 60 companies with market capitalizations between $1.25 billion and $12 billion at the initial time of purchase 
  • Mid cap strategy - which generally holds equity securities of approximately 50 to 60 companies with market capitalizations between $2.5 billion and $25 billion at the initial time of purchase 
  • Fixed income strategy - which typically invests in investment-grade, U.S. Treasury or governmental securities with short-to-intermediate maturities of one to 10 years
  • Balanced strategy - which generally combines investment strategies for the firm’s equity and fixed income strategies

Generally, the firm applies fundamental analysis, assessing companies based on such criteria as profitability, balance sheet quality, competitive advantages, market share positions, ability to generate excess cash flows, meaningful management ownership stakes, reinvestment opportunities and relative valuation. 

Fees Under Luther King Capital Management

Luther King Capital collects management fees based on a percentage of the client’s AUM. Though the firm may waive or negotiate its fees, there is a $20,000 minimum annual fee for non-institutional separately managed accounts. Here are the tiered fee schedules per investment strategy:

Investment Strategy Assets under Management Annual Fee
Equity First $2 million 1%
  Next $3 million 0.75%
  More than $5 million 0.50%

 

Investment Strategy Assets Under Management Annual Fee
Small Cap, Small-Mid Cap and Mid Cap First $5 million 1%
  Next $5 million 0.75%
  More than $10 million 0.50%

 

Investment Strategy Assets Under Management Annual Fee
Fixed Income First $2 million 0.50%
  Next $3 million 0.35% 
  More than $5 million  0.25%  

 

Investment Strategy Assets Under Management
Balanced Portion that is in equities follows equity schedule above
  Portion that is in fixed income follows fixed income schedule above

Luther King Capital Management Awards and Recognition

CFA magazine named founder King the most inspiring in the investment advisory profession in 2007.

He was also honored with the Daniel J. Forrestal III Leadership Award for Professional Ethics & Standards of Investment Practice by the CFA Institute in 2008.

Additionally, King has served as committee chairman of the investment advisory committee for the Trustees of the Employees Retirement System of Texas and vice chairman of the board to the University of Texas Investment Management Company, which oversees the endowment of the University of Texas a portion of the endowment for Texas A&M University, and trustee and chairman of the board of trustees at Texas Christian University.

What to Watch Out For

When Luther King Capital works with individuals, they are primarily very wealthy. Also, the firm does not offer financial planning. So if you’re a small investor or you’re seeking general financial advice, this firm will likely not be a good fit. 

Disclosures

Luther King Capital had no legal or disciplinary actions in the past 10 years to disclose in its most recent SEC filings.

Opening an Account With Luther King Capital Management

To contact Luther King Capital, call headquarters or the office nearest you:

Fort Worth (headquarters) - (817) 332-3235

Austin - (512) 474-6657

Dallas - (817) 332-3235

San Antonio - (210) 733-5526

Where Is Luther King Capital Management Located?

Headquarters are located at 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102

The other offices are at:

Four Barton Skyway, 1301 South Mopac Expressway, Suite 350, Austin, Texas 78746

2021 McKinney Avenue, Suite 400, Dallas, Texas 75201

5121 Broadway, San Antonio, Texas 78209

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

Tips for Finding a Financial Advisor 

  • Don’t have $2 million to invest - but want more options than mutual funds? Use SmartAsset’s financial advisor matching tool. Simply answer questions about your financial situation and preferences, and the program will match you with up to three suitable advisors in your area.
  • Ask how advisor candidates get paid. Those whose only compensation is the fees they collect from you will likely have fewer conflicts of interests than those who also receive commissions. That said, if any advisors say they are fiduciaries, that means they will work in your best interests.

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