Diamond Hill Investment Group, Inc. (DHIL): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of an independent asset manager, and frankly, understanding how Diamond Hill Investment Group, Inc. (DHIL) translates its disciplined, valuation-driven philosophy into real revenue is key. With $29.6 billion in Assets Under Management as of November 2025, their model hinges on earning investment advisory fees, which contributed to a trailing 12-month revenue of $152 million as of September 2025. We've broken down their entire Business Model Canvas-from the crucial role of financial intermediaries in their Channels to how they manage significant costs like employee compensation-so you can see the precise structure supporting their long-term focus. Keep reading to see the full nine-block blueprint of their operation.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships that let Diamond Hill Investment Group, Inc. (DHIL) actually run its asset management business and get its products to market. These aren't just vendors; they are integral to the flow of assets and the operational structure.

Foreside Financial Services, LLC for fund distribution

Foreside Financial Services, LLC is the designated distributor for The Diamond Hill Funds, which are a series of open-end registered investment companies, along with the Interval Fund. Honestly, this is a standard setup in the fund industry. What's interesting here is the compensation structure: Diamond Hill Investment Group, Inc. states clearly that neither Diamond Hill nor any of its employees receive any compensation from Foreside Financial Services, LLC.

Custodians and third-party service providers

Diamond Hill Capital Management, Inc. (DHCM), the advisory subsidiary, defines its administration services as including oversight of back-office service providers. The relationship with the Diamond Hill Funds themselves is paramount; DHCM generated approximately 66% of its 2024 revenue from its advisory and administration agreements with these Proprietary Funds. If those agreements were terminated or the fees reduced, it would materially and adversely affect DHCM. As of February 26, 2025, the total combined assets under management and assets under advisement for Diamond Hill was $32.8 billion. By September 30, 2025, the combined AUM/AUA stood at $32.4 billion, with proprietary funds accounting for $30.583 billion.

Broker-dealers and financial advisor networks (intermediaries)

Diamond Hill Investment Group, Inc. manages assets for intermediaries, and its distribution network relies on these channels to reach clients. The firm supports model delivery programs where an external investment manager handles the discretionary investment authority for client accounts. The firm is actively working to enhance distribution, evidenced by the conversion of the Large Cap Concentrated Fund to an ETF as a noted distribution upgrade. Flow data shows the importance of these channels:

• Net client inflows for the third quarter of 2025 were $41.0 million.
• This was an improvement from the third quarter of 2024, which saw net client outflows of $22.0 million.
• Fixed income strategies drove significant inflows, recording $976 million in the third quarter of 2025.

Institutional investors holding significant equity stakes

Ownership structure is a key partnership, showing alignment between management and external capital. As of December 31, 2024, employees and directors of DHIL and its affiliates held approximately 16% of the outstanding shares, leaving the remaining 84% with non-affiliated investors. Looking at the broader institutional landscape as of Q2 2025 data, institutional investors collectively owned 65.5% of the stock. Here's a snapshot of some of the major holders and their reported stakes based on recent filings:

Other significant institutional names noted include Punch & Associates Investment Management Inc. and MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd.

Finance: draft the Q4 2025 capital allocation review by January 15, 2026.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Key Activities

Active investment management across equity and fixed income

Diamond Hill Investment Group, Inc. provides investment management services through strategies covering differentiated U.S. and international equity, alternative long-short equity, and fixed income.

As of November 30, 2025, Assets Under Management (AUM) totaled $29.6 billion.

The firm's proprietary funds accounted for $18.9 billion of that AUM as of November 30, 2025.

The fixed income segment has seen significant growth; as of the third quarter of 2025, fixed income represented 28.1% of combined Assets Under Management and Advisement (AUM/AUA).

This compares to fixed income accounting for only 7.9% of its $26.6 billion under management in 2022.

The fixed income franchise added $1 billion in AUM every four or five months recently.

Specific strategy AUM figures from November 30, 2025, include:

• Large Cap strategy: $14.8 billion
• Short Duration Securitized Bond strategy: $5 billion
• Core Fixed Income strategy: $3.7 billion

Research and security selection based on valuation-driven principles

Diamond Hill invests based on a shared commitment to its valuation-driven investment principles and a long-term perspective.

The International Strategy seeks long-term capital appreciation by investing in non-US companies selling for less than the firm's estimate of intrinsic value.

In the third quarter of 2025, the International Strategy initiated seven new positions.

The firm's CEO noted that the Large Cap Concentrated strategy focuses on deeply understanding the valuations of the businesses invested in and being conscious of the price paid.

The firm incentivizes portfolio managers by measuring them on five-year performance periods.

Fund administration and regulatory compliance

Diamond Hill Investment Group, Inc. derives its consolidated revenues from investment advisory and fund administration services.

For the third quarter of 2025, revenue was $37.4 million.

Net income attributable to common shareholders for the third quarter of 2025 was $13.6 million.

The Net Operating Profit Margin for the third quarter of 2025 was 26%, with an Adjusted Net Operating Profit Margin of 32%.

The company returned capital to shareholders in Q3 2025:

The board declared a regular quarterly cash dividend of $1.50 per common share and a special dividend of $4.00 per share on October 30, 2025.

The expected total annual dividends for 2025 is $10.00 per share, resulting in $27.2 million returned to shareholders during 2025.

Product innovation, like converting funds to ETFs

Diamond Hill completed the conversion of its mutual fund, the Large Cap Concentrated Fund, into an actively managed exchange-traded fund (ETF), the Large Cap Concentrated ETF (DHLX), on September 30, 2025.

Following this conversion, Diamond Hill has 12 mutual funds remaining.

The newly converted ETF, DHLX, intends to hold approximately 20 to 30 securities.

The annual fund operating expenses for DHLX are 0.55%, which includes a management fee of 0.50%.

Alongside the ETF launch, the company also filed for ETF share class exemptive relief.

In the first quarter of 2025, the Diamond Hill Core Plus Bond Fund was consolidated.

Diamond Hill also launched the Securitized Credit Fund in 2024 based on client demand.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Key Resources

You're looking at the core assets that power Diamond Hill Investment Group, Inc. (DHIL) right now, late in 2025. These aren't just line items on a balance sheet; they are the engines driving their value proposition.

The most immediate measure of scale is the total capital they manage. As of November 30, 2025, Diamond Hill Investment Group reported Assets Under Management (AUM) totaling $29.6 billion. This figure represents the trust clients place in their management capabilities across various mandates.

This AUM is supported by a deep bench of talent. The firm relies on its highly experienced investment team and the intellectual capital derived from their research process. They apply a research-driven, bottom-up approach across their core asset classes. This commitment to deep, fundamental analysis is critical to achieving their clients' long-term goals.

A key structural advantage is the alignment of interests through employee ownership. Diamond Hill Investment Group emphasizes significant employee ownership across all of the Company's investment strategies. This structure incentivizes personnel to focus on long-term investment results, which is further supported by measuring portfolio managers on five-year performance periods. Furthermore, the firm has actively managed its share count; since Q4 2018, they have reduced their total share count by 524,000 shares, or 15%, after accounting for share issuances for compensation.

The firm's proprietary investment strategies and fund vehicles are the direct output of this intellectual capital. They manage a broad range of actively managed strategies, built on shared investment principles focused on long-term, fundamental investing. Here's a look at the composition of their proprietary funds as of November 2025:

• Proprietary funds totaled $18.9 billion of the total AUM.
• The firm manages nine equity investment strategies and seven fixed income investment strategies.
• They offer capabilities in US Equity, International Equity, Alternatives, Fixed Income, Securitized Credit, and Active ETFs.

To give you a clearer picture of where that $29.6 billion sits, here is a breakdown based on the reported proprietary fund performance as of November 30, 2025:

The firm's focus on capacity discipline protects its ability to add value, meaning they are selective about the mandates they accept. For instance, their institutional separate account minimums range from $10 million to $200 million, depending on the strategy.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Value Propositions

You're looking at what Diamond Hill Investment Group, Inc. (DHIL) promises to clients-the core of their value. It's all about a specific, disciplined way of investing, which they back up with hard numbers on capacity and product focus.

Disciplined, valuation-driven investment philosophy

The firm's approach centers on an active, research-driven method. They aim to compound returns by taking an ownership stake in an investment only when it's priced at a discount to its underlying value. They have the discipline to wait for that value to show up.

Alignment with clients is key, and they put their money where their mouth is. Portfolio managers invest alongside clients, meaning they have significant personal investments in the strategies they manage. To keep managers focused on the long haul, compensation is driven by investment results over rolling five-year periods.

Long-term focus over short-term market noise

This firm runs its business with a long-term time horizon in mind, believing patience is a competitive advantage. They seek client-partners who share this view because they know their investment style can be out of favor for uncomfortably long stretches. They make investments in the business itself-like modernizing technology and data structures-that can take years to pay off.

Capacity discipline to protect existing investors' returns

Diamond Hill Investment Group, Inc. recognizes the conflict where higher Assets Under Management (AUM) means more revenue for managers but can hurt existing clients' performance. Prudent capacity management is how they protect their ability to generate competitive long-term results. They empower portfolio managers with the discretion to determine the capacity limits for their strategies. For instance, they typically limit trading to 20% of average daily volume to keep market impact low.

You can see the scale they manage. As of September 30, 2025, combined Assets Under Management (AUM) and Assets Under Advisement (AUA) stood at $32.4 billion, up from $31.9 billion at the end of 2024. Flows show the dynamic: Q3 2025 saw net client inflows of $41.0 million, a definite improvement from the $22.0 million of net outflows seen in Q3 2024. This was driven by strong fixed income demand, with $976 million in fixed income inflows in that quarter, even as equity strategies saw $935 million in outflows.

The commitment to shareholder return is also evident in their capital actions:

• Total annual dividends expected for 2025: $10.00 per share.
• Special dividend declared for Q4 2025: $4.00 per share.
• Regular Q4 2025 dividend: $1.50 per share.
• Year-to-date 2025 share repurchases: approximately $14.5 million.
• Total capital returned to shareholders in 2025 (expected): approximately $27.2 million via dividends.

Diverse product suite: US/International Equity, Fixed Income, Alternatives

The firm offers strategies across several asset classes, with Fixed Income showing significant recent growth. As of November 30, 2025, their Proprietary Funds totaled $18.9 billion in AUM. Here's a look at some of the key components of their offering, based on the latest available proprietary fund data:

The Fixed Income franchise has been a key growth area; its AUM surpassed $6 billion by December 2024 and grew to surpass $7 billion in Q1 2025. This growth was fueled by $2.3 billion in net inflows during 2024. The product suite also includes International Equity and Alternative long-short equity capabilities, though specific AUM breakdowns for those segments aren't detailed here. You can see the focus on differentiated credit, given the securitized bond strategy size. Finance: draft 13-week cash view by Friday.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Customer Relationships

Fiduciary duty to clients as a core objective

Diamond Hill Investment Group, Inc. places its fiduciary duty to clients at the very top of its corporate objectives. This commitment means associates owe a duty of loyalty, fairness, and good faith to clients, ensuring client interests come first. The firm has adopted and complies with the CFA Institute's Asset Manager Code of Conduct, reaffirming compliance annually across categories including loyalty to clients and performance reporting. For example, the firm prohibits all associates from purchasing individual equity or fixed income securities, or third-party mutual funds, within the same Morningstar categories with which Diamond Hill Investment Group, Inc. competes, which is a direct measure to minimize conflicts of interest.

The firm's primary business objective is defined by meeting this fiduciary duty, with goals set around rolling five-year investment return periods where client returns are sufficiently above relevant passive benchmarks and rank above the peer group median for similar strategies. This focus is reflected in the scale of assets under their care; as of November 30, 2025, Diamond Hill Investment Group, Inc. reported $29.6 billion in assets under management (AUM).

Building enduring, long-term client partnerships

Diamond Hill Investment Group, Inc. operates with a long-term time horizon, thinking in terms of years rather than quarters, which is the same perspective used in managing client portfolios. The firm actively seeks client-partners who share this long-term perspective, understanding that their investment style may be out of favor for uncomfortably long periods. This long-term alignment is structurally supported: portfolio managers have a significant personal investment in the strategy they manage, ensuring they are invested heavily alongside clients. Furthermore, portfolio managers are incentivized to stay focused on the long-term by being measured on five-year performance periods. This focus aided growth in fixed income, where long-term partners were early adopters of newly launched fixed income strategies. For instance, the firm launched the Securitized Credit Fund in 2024 based on client demand for more focused exposure to securitized assets.

The scale and composition of assets managed as of November 30, 2025, illustrate the breadth of these partnerships:

Dedicated client service and relationship management

The firm prioritizes attracting and retaining talent who share a commitment to serving clients and delivering excellent long-term investment results. Client service is primarily managed through unaffiliated financial intermediaries, or Sponsor Firms, for most individual accounts, but the firm maintains direct contact channels. For example, Diamond Hill Investment Group, Inc. provides fee invoices directly to the client and custodian, unless instructed otherwise. The firm generally reviews client accounts at least quarterly. The total combined assets under management and advisement (AUM and AUA) stood at $31.6 billion as of March 31, 2025, down from $31.9 billion at the end of 2024. Client flow dynamics show the challenge and focus: the first quarter of 2025 saw net client outflows of $529.0 million, compared to net inflows of $118.0 million in the first quarter of 2024. The firm's differentiated fixed income strategies surpassed $7 billion in AUM in Q1 2025, helping to partially offset outflows from U.S. equity strategies.

Key contact points for investor relations and general inquiries include:

• Investor Relations Contact Phone: (614) 255-5989
• General Information Phone: (614) 255-3333
• Investor Relations Email: IR@diamond-hill.com

Transparency in investment process and reporting

Operating with ethics and integrity is foundational to the client-centric approach, which includes a belief in being as transparent as possible regarding business policies and practices. Diamond Hill Investment Group, Inc. provides fee invoices that detail the fee amount, the value of assets used for the fee calculation, and the fee calculation method itself. The firm's Code of Ethics is designed to ensure client interests come first, and this commitment to transparency extends to disclosing potential conflicts of interest, such as the potential conflict arising from managing both long-only and long-short accounts, which is managed by a policy that prohibits holding a security long in one client account while shorting it in another.

The firm reports its results publicly, with the latest reported AUM as of November 30, 2025. The firm also provides detailed breakdowns of its strategies, such as the Large Cap strategy leading with $14.8 billion AUM as of that date.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Channels

You're looking at how Diamond Hill Investment Group, Inc. (DHIL) gets its investment products into the hands of clients. This is all about distribution, and as of late 2025, they rely on a mix of direct fund offerings and managed accounts.

Proprietary mutual funds (Diamond Hill Funds)

The proprietary mutual funds, known as the Diamond Hill Funds, remain a core channel. As of November 30, 2025, these funds totaled $18.9 billion in assets under management. This figure represents a significant portion of their total book. You should know that the firm had 12 active mutual funds following the conversion of the Large Cap Concentrated mutual fund to an ETF during 2025. The fixed income segment within these offerings is gaining traction; for instance, the fixed income strategies added nearly $1 billion in net flows during the third quarter of 2025. The composition of the proprietary funds as of November 30, 2025, included:

• Large Cap strategy: leading with $14.8 billion AUM.
• Short Duration Securitized Bond strategy: holding $5 billion AUM.
• Core Fixed Income strategy: reaching $3.7 billion AUM.

Separately Managed Accounts (SMAs) for institutions

Separately Managed Accounts (SMAs) are a key way institutions access DHIL's strategies directly. While the exact split between SMAs and ETFs within the non-mutual fund assets isn't always explicitly detailed in the top-line reports, we can look at Assets Under Advisement (AUA) as a related metric, which is often comprised of SMAs. As of October 31, 2025, Assets Under Advisement stood at $1.8 billion. AUA is primarily comprised of the Large Cap and Select strategies. The overall AUM/AUA combined figure was $29.6 billion as of November 30, 2025, meaning the combined total of SMAs, ETFs, and other pooled vehicles outside the proprietary mutual funds was approximately $10.7 billion ($29.6 billion total minus $18.9 billion in proprietary funds). The firm's fixed income assets, which are often delivered via SMAs, represented 28.1% of total AUM at the end of Q3 2025.

Exchange-Traded Funds (ETFs), a growing channel

Exchange-Traded Funds (ETFs) represent a channel where Diamond Hill Investment Group, Inc. is actively evolving its product lineup. A notable move in 2025 was converting the Large Cap Concentrated mutual fund to the actively managed Diamond Hill Large Cap Concentrated ETF (DHLX). This shift signals a commitment to the ETF structure, which often appeals to broader investor bases and can be more cost-efficient for certain mandates. While specific AUM for the ETF suite isn't broken out separately from the remaining non-mutual fund assets, the firm is clearly using this structure to house certain strategies. The firm's focus on fixed income, which saw $976 million in net inflows in Q3 2025, is likely being channeled through both SMAs and ETFs, including the newer Diamond Hill Securitized Total Return Fund, which uses an interval fund structure suited for less liquid securities.

Financial intermediaries and institutional consultants

This channel involves the wholesale distribution network-the advisors, consultants, and platforms that place DHIL's products onto client platforms. While specific revenue share or AUM sourced through these partners isn't published as a standalone number, the overall flow data suggests their importance. For example, in Q2 2025, outflows affected nearly all distribution channels, including proprietary funds and separately managed accounts, indicating broad pressure across the sales network. Conversely, the net client inflows of $41.0 million in Q3 2025, driven largely by fixed income, suggest success in placing those specific products via intermediaries. The firm's distribution arm works through Foreside Financial Services, LLC (Member FINRA) for the Diamond Hill Funds. The company's commitment to capital return, including a special dividend of $4.00 per share announced in Q4 2025, is often a positive signal to institutional consultants looking for alignment.

Here's a snapshot of the scale across different reporting dates:

The firm's total assets under management and advisement were $31.6 billion as of March 31, 2025. That's a lot of capital moving through these various pipes. Finance: draft 13-week cash view by Friday.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Customer Segments

As of late 2025, Diamond Hill Investment Group, Inc. serves its client base through various investment vehicles, which suggests a segmentation across institutional, intermediary, and individual investor channels.

The combined Assets Under Management (AUM) and Assets Under Advisement (AUA) stood at $32.4 billion as of September 30, 2025. More recently, the total AUM was reported at $29.6 billion as of November 30, 2025.

The client base is served through distinct investment vehicles, which can be mapped to the primary customer segments:

The strategies employed by Diamond Hill Investment Group, Inc. also indicate the focus areas for these client segments. For instance, the Large Cap strategy held the largest portion of assets:

• Large Cap strategy AUM: $16.2 billion (as of September 30, 2025)
• Short Duration Securitized Bond strategy AUM: $4.9 billion (as of September 30, 2025)
• Core Fixed Income strategy AUM: $3.5 billion (as of September 30, 2025)
• Long-Short strategy AUM: $2.1 billion (as of September 30, 2025)

Looking at the November 30, 2025 AUM figures, the Large Cap strategy remained the largest, with $14.8 billion, followed by Short Duration Securitized Bond at $5 billion, and Core Fixed Income at $3.7 billion.

The firm's fixed income strategies saw significant growth, with fixed income assets surpassing $6 billion in AUM by December 2024. Net client inflows for the third quarter of 2025 were $41.0 million.

The segment for U.S. and foreign clients cannot be explicitly quantified with the available data, as the provided figures are segmented by investment vehicle and strategy, not by client domicile.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Cost Structure

Employee compensation and benefits, excluding deferred compensation expense, represented the largest operating expense component for Diamond Hill Investment Group, Inc. in the third quarter of 2025.

For the three months ended September 30, 2025, Compensation and related costs, excluding deferred compensation expense totaled $18,352 thousand. This was a decrease of 6% from the $19,509 thousand reported for the same period in 2024.

Deferred compensation expense showed a notable shift. For the three months ended September 30, 2025, this expense was $2,052 thousand, a 9% decrease from the $2,250 thousand in the third quarter of 2024. In the second quarter of 2025, the deferred compensation expense flipped to a $3.0 million expense from a benefit in the prior year period, and the non-GAAP adjustment for Q2 2025 excluded deferred comp liability effects of ($3,042k).

Fund administration fees for the three months ended September 30, 2025, were $1,009 thousand, an increase of 15% from the $877 thousand reported for the three months ended September 30, 2024. These fees include administration fees received from the Proprietary Funds, calculated as a percentage of the Proprietary Funds' average AUM.

General and administrative operating expenses for the three months ended September 30, 2025, were $4,260 thousand, a slight decrease of 1% from the $4,324 thousand in the third quarter of 2024. The GAAP operating expenses for the second quarter of 2025 were reported as $28.3 million.

Here's the quick math on the Q3 2025 operating expense breakdown (in thousands):

The total operating expenses for Q3 2025 were $27,674 thousand, which was a 4% decrease year-over-year.

The components that make up the operating expenses for Diamond Hill Investment Group, Inc. include:

• Compensation and related costs, excluding deferred compensation expense: $18,352 thousand (Q3 2025)
• Deferred compensation expense: $2,052 thousand (Q3 2025)
• General and administrative: $4,260 thousand (Q3 2025)
• Sales and marketing: $2,001 thousand (Q3 2025)
• Fund administration: $1,009 thousand (Q3 2025)

Finance: draft 13-week cash view by Friday.

Diamond Hill Investment Group, Inc. (DHIL) - Canvas Business Model: Revenue Streams

You're looking at the money-making engine for Diamond Hill Investment Group, Inc. (DHIL) as of late 2025. Honestly, for an asset manager, it all boils down to how much capital they are entrusted with and the fees they charge on it.

The primary source of revenue for Diamond Hill Investment Group, Inc. is investment advisory fees, which are directly calculated based on the Assets Under Management (AUM) and Assets Under Advisement (AUA). As of September 30, 2025, the combined AUM and AUA stood at $32.4 billion. This figure is the base upon which the main revenue stream is calculated, even though fee compression is a constant industry headwind.

Beyond the core advisory fees, the firm pulls in revenue from other services. These include fund administration and other related service fees charged to the funds they manage. To give you a snapshot of the top-line performance around this time, the reported revenue for the third quarter of 2025 was $37.4 million. This quarterly figure gives you a clearer picture of the immediate impact of AUM levels and fee collection.

The firm also generates revenue from its own capital. This is investment income derived from the firm's balance sheet investments. For the third quarter of 2025, this investment income amounted to $8.5 million. This is a notable component, though it can fluctuate more than the recurring advisory fees.

Here's a quick look at some key financial metrics relevant to revenue generation and profitability around the end of the third quarter of 2025:

While the specific trailing 12-month revenue figure you mentioned isn't directly in the latest reports, we can look at the components that make up the total revenue picture. The revenue mix is heavily weighted toward management fees, but the firm's ability to control costs against that revenue is key. The adjusted net operating profit margin held steady at 32% for Q3 2025, which shows expense discipline even with a slight top-line dip.

You can break down the revenue drivers by client flow, which directly impacts the AUM base for advisory fees:

• Net client inflows for Q3 2025 were $41.0 million.
• Fixed Income strategies drove inflows of nearly $1 billion (specifically $976 million) in Q3 2025.
• Equity strategies experienced outflows of $935 million in Q3 2025.

The shift in asset composition is important for the revenue stream quality; fixed income inflows of nearly $2 billion year-to-date suggest a growing base for recurring fees in that segment. Finance: draft 13-week cash view by Friday.