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What changed in DIAMOND HILL INVESTMENT GROUP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DIAMOND HILL INVESTMENT GROUP INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+353 added−118 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-26)

Top changes in DIAMOND HILL INVESTMENT GROUP INC's 2025 10-K

353 paragraphs added · 118 removed · 102 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

34 edited+17 added−4 removed27 unchanged
Biggest changeFactors that may cause such actual results or experiences to differ materially from results discussed in the forward-looking statements include, but are not limited to: (i) any reduction in the Company’s assets under management (“AUM”) or assets under advisement (“AUA”); (ii) withdrawal, renegotiation, or termination of investment advisory agreements; (iii) damage to the Company’s reputation; (iv) failure to comply with investment guidelines or other contractual requirements; (v) challenges from the competition the Company faces in its business; (vi) challenges from industry trends towards lower fee strategies and model portfolio arrangements; (vii) adverse regulatory and legal developments; (viii) unfavorable changes in tax laws or limitations; (ix) interruptions in or failure to provide critical technological service by the Company or third parties; (x) adverse civil litigation and government investigations or proceedings; (xi) failure to adapt to or successfully incorporate technological changes, such as artificial intelligence (“AI”), into the Company’s business; (xii) risk of loss on the Company’s investments; (xiii) lack of sufficient capital on satisfactory terms; (xiv) losses or costs not covered by insurance; (xv) a decline in the performance of the Company’s products; (xvi) changes in interest rates and inflation; (xvii) changes in national and local economic and political conditions; (xix) the continuing economic uncertainty in various parts of the world; (xviii) the effects of pandemics and the actions taken in connection therewith; (xx) political uncertainty caused by, among other things, political parties, economic nationalist sentiments, tensions surrounding the current socioeconomic landscape; and (xix), other risks identified from time-to-time in the Company’s public documents on file with the U.S.
Biggest changeFactors that could cause the Company’s actual results or experiences to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to: (i) declines or volatility in the Company’s AUM or AUA, whether due to market conditions, investment performance, client withdrawals, asset allocation decisions, or otherwise; (ii) the loss, renegotiation, non-renewal, or termination of investment advisory or administration agreements, including as a result of the proposed merger with First Eagle or client consent related requirements; (iii) risks related to, or the failure to consummate, the proposed merger with First Eagle, including the failure to obtain required approvals or client consents, delays in completion, transaction-related costs, restrictions on operations prior to closing, disruption to business relationships, shareholder litigation, or failure to realize anticipated benefits; (iv) damage to the Company’s reputation or adverse public perception; (v) failure to comply with investment guidelines, fiduciary obligations, regulatory requirements, or other contractual obligations; (vi) intense competition within the investment management industry, including from firms with greater resources or lower-fee or passive investment offerings; (vii) industry trends toward lower fee products, passive strategies, and model portfolio arrangements that may adversely impact revenues; (viii) adverse legal, regulatory, tax, or accounting developments or increased compliance costs; (ix) cybersecurity incidents, technology failures, or disruptions involving the Company or third-party service providers; (x) operational risks, including errors, systems interruptions, employee misconduct, or inadequate risk management controls; (xi) the Company’s ability to adapt to technological change, including the effective and responsible development and use of artificial intelligence (“AI”) and compliance with evolving AI-related regulations; (xii) losses on the Company’s investments or fluctuations in investment income; (xiii) limitations on access to capital or increased costs of financing; (xiv) losses or liabilities not covered by insurance; (xv) adverse changes in interest rates, inflation, credit conditions, or capital markets; (xvi) changes in domestic or global economic, political, or geopolitical conditions, including political uncertainty and economic nationalism; (xvii) the effects of natural disasters, pandemics, or other catastrophic or unpredictable events; and (xviii) other risks and uncertainties described from time to time in the Company’s filings with the U.S.
Business Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K (this “Form 10-K”), the documents incorporated herein by reference and statements, whether oral or written, made from time to time by representatives of Diamond Hill Investment Group, Inc., an Ohio corporation organized in 1990 (“DHIL”, and collectively with its subsidiaries, the “Company”), may contain or incorporate “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLR Act”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Bu siness Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K (this “Form 10-K”), the documents incorporated herein by reference and statements, whether oral or written, made from time to time by representatives of Diamond Hill Investment Group, Inc., an Ohio corporation organized in 1990 (“DHIL”, and collectively with its subsidiaries, the “Company”), may contain or incorporate “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLR Act”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
These asset allocators include centralized research teams at institutional consulting firms, wirehouses, banks, independent broker dealers (“IBD”), and independent registered investment advisory firms (“RIAs”). The Company also believes having a focus on plan sponsors with their own investment research teams is important. The Company’s distribution team members possess a deep understanding of the Company’s clients’ business models and needs.
These asset allocators include centralized research teams at institutional consulting firms, wirehouses, banks, independent broker dealers, and independent registered investment advisory firms. The Company also believes having a focus on plan sponsors with their own investment research teams is important. The Company’s distribution team members possess a deep understanding of the Company’s clients’ business models and needs.
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.
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.
A proactive, investment content-led marketing effort with a compelling digital ecosystem allows the Company to deliver the right content to the right clients/prospects in the right format at all stages of the client lifecycle. 6 Table of Contents Distribution technology and business intelligence, including the use of third-party data sets and advanced analytics, provide a solid and scalable foundation for all client interactions.
A proactive, investment content-led marketing effort with a compelling digital ecosystem allows the Company to deliver the right content to the right clients/prospects in the right format at all stages of the client lifecycle. Distribution technology and business intelligence, including the use of third-party data sets and advanced analytics, provide a solid and scalable foundation for all client interactions.
DHCM does not have discretionary investment authority over individual client accounts in the model delivery programs, and therefore, the AUA is not included in the Company’s AUM. The Company’s revenues are highly dependent on both the value and composition of AUM and AUA.
DHCM does not have discretionary investment authority over individual client accounts in the model delivery programs, and therefore, the AUA is not included in the Company’s AUM. 5 Table of Contents The Company’s revenues are highly dependent on both the value and composition of AUM and AUA.
The Company undertakes no obligation to update any forward-looking statements after the date they are made, whether as a result of new information, future events or developments, except as required by federal securities laws, although it may do so from time to time.
The Company undertakes no obligation to update any forward-looking statements after the date they are made, whether as a result of new information, future events or developments or otherwise, 3 Table of Contents except as required by federal securities laws, although it may do so from time to time.
The Company’s capacity as of December 31, 2024 was estimated to be $45 billion to $55 billion in domestic equities, $20 billion to $30 billion in international equities, and $50 billion to $70 billion in fixed income. The Company’s capacity increases with the development of new products or strategies.
The Company’s capacity as of December 31, 2025 was estimated to be $50 billion to $60 billion in domestic equities, $20 billion to $30 billion in international equities, and $50 billion to $70 billion in fixed income. The Company’s capacity increases with the development of new products or strategies.
DHCM believes that it has strong relationships with the Diamond Hill Funds and their board of trustees, and DHCM has no reason to believe that these advisory or administration contracts will not be renewed in the future. However, there is no assurance that the Diamond Hill Funds will choose to continue their relationships with DHCM.
DHCM believes that it has strong relationships with the Proprietary Funds and their respective boards of trustees, and DHCM has no reason to believe that these advisory or administration contracts will not be renewed in the future. However, there is no assurance that the Proprietary Funds will choose to continue their relationships with DHCM.
Securities and Exchange Commission (“SEC”), including those discussed in Item 1A of this Form 10-K. Forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above, in Item 1A of this Form 10-K, and in the Company’s other public documents on file with the SEC.
Forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above, in Item 1A of this Form 10-K, and in the Company’s other public documents on file with the SEC.
Information contained on the Company’s website is not part of this Form 10-K or any other report or document that it files with, or furnishes to, the SEC. These reports are also available free of charge on the SEC’s website at http://www.sec.gov .
Information contained on the Company’s website is not part of this Form 10-K or any other report or document that it files with, or furnishes to, the SEC. These reports are also available free of charge on the SEC’s website at http://www.sec.gov . References in this Form 10-K to our website and the SEC's website are inactive text references only.
The team takes a consultative, customized approach to developing and maintaining relationships. Creating a customized approach requires integrating marketing throughout the sales process and client lifecycle.
The team takes a consultative, customized approach to developing and maintaining relationships. 7 Table of Contents Creating a customized approach requires integrating marketing throughout the sales process and client lifecycle.
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, a series of open-end mutual funds (each, a “Diamond Hill Fund”, and collectively, the “Diamond Hill Funds”) and the Diamond Hill Securitized Credit Fund, a closed-end registered investment company (“DHSC”, and collectively with the Diamond Hill Funds, the “Proprietary Funds”).
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, a series of funds (each, a “Diamond Hill Fund”, and collectively, the “Diamond Hill Funds”), including open-end mutual funds and the Diamond Hill Large Cap Concentrated ETF, an exchange-traded fund (“ETF”), and the Diamond Hill Securitized Credit Fund, a closed-end registered investment company (“DHSC”, and collectively with the Diamond Hill Funds, the “Proprietary Funds”).
(b) AUA is primarily comprised of model portfolio assets related to the Large Cap and Select strategies. 5 Table of Contents Change in Assets Under Management For the Year Ended December 31, (in millions) 2024 2023 2022 AUM at beginning of the year $ 27,418 $ 24,763 $ 31,028 Net cash inflows (outflows) Proprietary Funds 726 (599) (2,433) Separately managed accounts (1,269) (416) (73) Collective investment trusts 403 153 486 Other pooled vehicles (149) 368 (221) (289) (494) (2,241) Net market appreciation/(depreciation) and income 2,883 3,149 (4,024) Increase (decrease) during the year 2,594 2,655 (6,265) AUM at end of the year 30,012 27,418 24,763 AUA at end of year 1,913 1,746 1,802 Total AUM and AUA at end of year $ 31,925 $ 29,164 $ 26,565 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.
(b) AUA is primarily comprised of model portfolio assets related to the Large Cap and Select strategies. 6 Table of Contents Change in Assets Under Management For the Year Ended December 31, (in millions) 2025 2024 2023 AUM at beginning of the year $ 30,012 $ 27,418 $ 24,763 Net cash inflows (outflows) Proprietary Funds (613 ) 726 (599 ) Separately managed accounts (1,341 ) (1,269 ) (416 ) Collective investment trusts (306 ) 403 153 Other pooled vehicles (481 ) (149 ) 368 (2,741 ) (289 ) (494 ) Net market appreciation and income 2,111 2,883 3,149 Increase (decrease) during the year (630 ) 2,594 2,655 AUM at end of the year 29,382 30,012 27,418 AUA at end of the year 1,580 1,913 1,746 Total AUM and AUA at end of year $ 30,962 $ 31,925 $ 29,164 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.
The following is a summary of the Company’s AUM by product and investment strategy, a roll-forward of the change in AUM, and a summary of AUA for each of the past three years ended December 31, 2024: Assets Under Management and Assets Under Advisement As of December 31, (in millions) 2024 2023 2022 Proprietary Funds $ 18,097 $ 15,879 $ 14,745 Separately managed accounts 6,108 6,617 6,220 Collective investment trusts 1,947 1,359 1,040 Other pooled vehicles 3,860 3,563 2,758 Total AUM 30,012 27,418 24,763 Total AUA 1,913 1,746 1,802 Total AUM and AUA $ 31,925 $ 29,164 $ 26,565 4 Table of Contents Assets Under Management by Investment Strategy As of December 31, (in millions) 2024 2023 2022 U.S.
The following is a summary of the Company’s AUM by product and investment strategy, a roll-forward of the change in AUM, and a summary of AUA for each of the past three years ended December 31, 2025: Assets Under Management and Assets Under Advisement As of December 31, (in millions) 2025 2024 2023 Proprietary Funds $ 18,785 $ 18,097 $ 15,879 Separately managed accounts 5,110 6,108 6,617 Other pooled vehicles 3,746 3,860 3,563 Collective investment trusts 1,741 1,947 1,359 Total AUM 29,382 30,012 27,418 Total AUA 1,580 1,913 1,746 Total AUM and AUA $ 30,962 $ 31,925 $ 29,164 Assets Under Management by Investment Strategy As of December 31, (in millions) 2025 2024 2023 U.S.
Equity 21,963 21,885 20,835 Alternatives Long-Short 1,684 1,725 1,752 Total Alternatives 1,684 1,725 1,752 International Equity International 141 109 52 Total International Equity 141 109 52 Fixed Income Short Duration Securitized Bond 3,732 1,948 1,308 Core Fixed Income 2,416 1,735 792 Securitized Credit 52 — — Long Duration Treasury 24 26 33 Total Fixed Income 6,224 3,709 2,133 Total-All Strategies 30,012 27,428 24,772 (Less: Investments in affiliated funds) (a) — (10) (9) Total AUM 30,012 27,418 24,763 Total AUA (b) 1,913 1,746 1,802 Total AUM and AUA $ 31,925 $ 29,164 $ 26,565 (a) Certain of the Proprietary Funds own shares of the Diamond Hill Short Duration Securitized Bond Fund.
Equity 17,932 21,963 21,885 Alternatives Long-Short 2,344 1,684 1,725 Total Alternatives 2,344 1,684 1,725 International Equity International 161 141 109 Total International Equity 161 141 109 Fixed Income Short Duration Securitized Bond 5,064 3,732 1,948 Core Fixed Income 3,691 2,416 1,735 Securitized Credit 133 52 — Securitized Total Return 31 — — Long Duration Treasury 26 24 26 Total Fixed Income 8,945 6,224 3,709 Total All Strategies 29,382 30,012 27,428 (Less: Investments in affiliated funds) (a) — — (10 ) Total AUM 29,382 30,012 27,418 Total AUA (b) 1,580 1,913 1,746 Total AUM and AUA $ 30,962 $ 31,925 $ 29,164 (a) Certain of the Proprietary Funds own shares of the Diamond Hill Short Duration Securitized Bond Fund.
The Company’s overall headcount has remained relatively consistent over the last five years, and was 127 as of December 31, 2024, two employees fewer than as of December 31, 2023. The average employee tenure is 8.3 years, and more than one-third of its employees have been with the Company more than 10 years.
The Company’s overall headcount has remained relatively consistent over the last five years, and was 120 as of December 31, 2025, seven employees fewer than as of December 31, 2024. The average employee tenure is 9.3 years, and approximately 42.5% of its employees have been with the Company more than 10 years.
Model Delivery Programs - Assets Under Advisement DHCM provides strategy-specific model portfolios to sponsors of model delivery programs. DHCM is paid for its services by the program sponsors at a pre-determined rate based on AUA in the model delivery programs.
DHCM is paid for its services by the program sponsors at a pre-determined rate based on AUA in the model delivery programs.
Employees who are motivated by giving and receiving respect communicate and provide feedback candidly, transparently, and with positive intent. They are humble in their assumptions and listen to better understand others.
Employees who embrace trust act with integrity, are authentic and honest in interactions with others, and put client interests ahead of all others. Employees who are motivated by giving and receiving respect communicate and provide feedback candidly, transparently, and with positive intent. They are humble in their assumptions and listen to better understand others.
The Company’s long-term, valuation-disciplined investment principles are foundational to its culture and have been consistently implemented since the firm’s inception. All members of the investment team believe in, and adhere to, the same investment principles.
The Company’s long-term, valuation-disciplined investment principles are foundational to its culture and have been consistently implemented since the firm’s inception. All members of the investment team believe in, and adhere to, the same investment principles. The Company’s employees invest alongside its clients, and portfolio managers have significant personal investments in the strategy or strategies they manage.
The Company’s five-year average employee turnover rate is 7.4%. The Company’s employees are based in 12 states, and approximately 80% of its employees reside in Ohio. As of December 31, 2024, females represented 43% of DHIL’s board of directors (“Board”), 67% of the Company’s management team, and approximately 33% of its employees.
The Company’s five-year average employee turnover rate is approximately 6.6%. The Company’s employees are based in 9 states, and approximately 85% of its employees reside in Ohio. As of December 31, 2025, females represented 50% of DHIL’s board of directors (“Board”) and approximately 31% of its employees.
Equity Large Cap $ 17,702 $ 17,307 $ 16,478 Small-Mid Cap 2,009 2,588 2,646 Mid Cap 1,082 1,023 899 Select 755 593 392 Small Cap 253 255 306 Large Cap Concentrated 129 98 99 Micro Cap 33 21 15 Total U.S.
Equity Large Cap $ 14,398 $ 17,702 $ 17,307 Small-Mid Cap 1,374 2,009 2,588 Mid Cap 882 1,082 1,023 Select 778 755 593 Small Cap 264 253 255 Large Cap Concentrated 190 129 98 Micro Cap 46 33 21 Total U.S.
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 DHCM’s principal source of revenue is investment advisory fee income earned from managing client accounts under investment advisory and sub-advisory agreements.
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.
The preceding descriptions of the regulatory and statutory provisions applicable to DHCM are not exhaustive or complete and are qualified in their entirety by reference to the respective statutory or regulatory provisions.
The preceding descriptions of the regulatory and statutory provisions applicable to DHCM are not exhaustive or complete and are qualified in their entirety by reference to the respective statutory or regulatory provisions. Failure to comply with these requirements could have a material adverse effect on DHCM’s business.
Readers are advised to consult any further disclosures the Company makes on related subjects in its public announcements and SEC filings.
Readers are advised to consult any further disclosures the Company makes on related subjects in its public announcements and SEC filings. The Company does not endorse any projections regarding future performance that may be made by third parties.
Such statements are provided under the “safe harbor” protection of the PSLR Act. Forward-looking statements include, but are not limited to, statements regarding anticipated operating results, prospects and levels of assets under management, technological developments, economic trends (including interest rates and market volatility), expected transactions and similar matters.
Forward-looking statements include, but are not limited to, statements regarding anticipated operating results, prospects and levels of assets under management ("AUM") or assets under advisement ("AUA"), technological developments, economic trends (including interest rates and market volatility), the proposed merger with First Eagle Investment Management, LLC, a Delaware limited liability company ("First Eagle"), other expected transactions and similar matters.
The Company does not endorse any projections regarding future performance that may be made by third parties. 3 Table of Contents Overview DHIL derives its consolidated revenue and net income from investment advisory and fund administration services provided by its wholly owned subsidiary, Diamond Hill Capital Management, Inc., an Ohio corporation (“DHCM”).
Overview DHIL derives its consolidated revenue and net income from investment advisory and fund administration services provided by its wholly-owned subsidiary, Diamond Hill Capital Management, Inc., an Ohio corporation (“DHCM”).
If any of DHCM’s advisory or administration agreements with the Diamond Hill Funds were terminated or not renewed, or were amended or modified to reduce fees, DHCM would be materially and adversely affected. DHCM generated approximately 66%, 68%, and 71% of its 2024, 2023, and 2022 revenues, respectively, from its advisory and administration agreements with the Diamond Hill Funds.
Contractual Relationships with the Proprietary Funds DHCM is highly dependent on its contractual relationships with the Proprietary Funds. If any of DHCM’s advisory or administration agreements with the Proprietary Funds were terminated or not renewed, or were amended or modified to reduce fees, DHCM would be materially and adversely affected.
As of December 31, 2024, racial or ethnic minorities represented approximately 14% of the Company’s workforce and 14% of the Board. Please see additional demographic details on the Company’s website. Competitive Pay and Benefits The Company’s competitive compensation and benefits are designed to help attract, retain, and motivate employees who embody its values.
As of December 31, 2025, racial or ethnic minorities represented approximately 15% of the Company’s workforce and 12.5% of the Board. Competitive Pay and Benefits The Company’s competitive compensation and benefits are designed to help attract, retain, and motivate employees who embody its values. The Company aligns its employees’ compensation with client outcomes, individual and team results, and company performance.
The Company aligns its employees’ compensation with client outcomes, individual and team results, and company performance. Culture The Company’s culture emphasizes four key values: curiosity, ownership, trust and respect. The way its employees embody these core values creates the Company’s culture.
Culture The Company’s culture emphasizes four key values: curiosity, ownership, trust, and respect. The way its employees embody these core values creates the Company’s culture. The culture allows the Company to attract and retain employees who share its commitment to client alignment, are motivated by investment excellence, and are committed to delivering excellent outcomes.
The fees earned depend on the type of investment strategy, account size, and servicing requirements. DHCM’s revenues depend largely on the total value and composition of its AUM. Accordingly, net cash flows from clients, market fluctuations, and the composition of AUM impact the Company’s revenues and results of operations.
Assets Under Management DHCM’s principal source of revenue is investment advisory fee income earned from managing client accounts under investment advisory and sub-advisory agreements. The fees earned depend on the type of investment strategy, account size, and servicing requirements. DHCM’s revenues depend largely on the total value and composition of its AUM.
DHCM’s trading activities for client accounts are regulated by the SEC under the 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.
ERISA and applicable provisions of the Internal Revenue Code of 1986, as amended, impose certain duties on persons who are fiduciaries, prohibit certain transactions involving ERISA plan clients, and provide monetary penalties for violations of these prohibitions. 8 Table of Contents DHCM’s trading activities for client accounts are regulated by the SEC under the Exchange Act, which includes regulations governing trading on inside information, market manipulation, and a broad number of U.S. trading and market regulation requirements.
Employees who think and act like business owners naturally embrace a long-term mindset. They lead by example and accept accountability for ensuring strong client outcomes. Employees who embrace trust act with integrity, are authentic and honest in interactions with others, and put client interests ahead of all others.
Employees who are curious focus on continuous self-improvement and have a passion for learning. They are open-minded, seek differing perspectives, and go beyond surface-level assumptions. Employees who think and act like business owners naturally embrace a long-term mindset. They lead by example and accept accountability for ensuring strong client outcomes.
The culture allows the Company to attract and retain employees who share its commitment to client alignment, are motivated by investment excellence, and are committed to delivering excellent outcomes. Diversity, equity, and inclusion is embedded in the policies, practices, and strategic initiatives of the Company, ensuring we have teams that encourage varied points of view.
Diversity, equity, and inclusion is embedded in the policies, practices, and strategic initiatives of the Company, ensuring it has teams that encourage varied points of view. The Company believes clients are best served by decision making that engages diverse perspectives. 9 Table of Contents The Company's culture manifests itself in a variety of ways.
Removed
ERISA and applicable provisions of the Internal Revenue Code of 1986, as amended, impose certain duties on persons who are fiduciaries, prohibit certain transactions involving ERISA plan clients, and provide monetary penalties for violations of these prohibitions. In recent years, the Department of Labor, which administers ERISA, has been active in proposing and adopting regulations affecting the asset management industry.
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Such statements are provided under the “safe harbor” protection of the PSLR Act.
Removed
Failure to comply with these requirements could have a material adverse effect on DHCM’s business. 7 Table of Contents Contractual Relationships with the Diamond Hill Funds DHCM is highly dependent on its contractual relationships with the Diamond Hill Funds.
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Securities and Exchange Commission (“SEC”), including those discussed in Item 1A of this Form 10-K. Due to the significant uncertainties in forward-looking statements, the inclusion of such information should not be regarded as a representation by the Company or any other person that its expectations, objectives and plans will be achieved.
Removed
The Company believes clients are best served by decision making that engages diverse perspectives. Our culture manifests itself in a variety of ways. Employees who are curious focus on continuous self-improvement and have a passion for learning. They are open-minded, seek differing perspectives, and go beyond surface-level assumptions.
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Proposed Merger with First Eagle Investment Management, LLC On December 10, 2025, DHIL entered into an Agreement and Plan of Merger (the "Merger Agreement") with First Eagle, and Soar Christopher Holdings, Inc., an Ohio corporation and a wholly-owned subsidiary of First Eagle ("Merger Sub"), pursuant to which, upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into DHIL (the "Merger"), whereupon the separate existence of Merger Sub will cease, and DHIL will be the surviving corporation as a wholly-owned subsidiary of First Eagle.
Removed
The Company’s employees invest alongside its clients, and portfolio managers have significant personal investments in the strategy or strategies they manage. 8 Table of Contents SEC Filings The Company maintains a website at www.diamond-hill.com .
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Pursuant to the Merger Agreement, at the effective time of the Merger, each issued and outstanding DHIL common share (including each DHIL restricted share but excluding any DHIL common shares that are held by First Eagle, Merger Sub or any other subsidiary of First Eagle or DHIL or any DHIL common shares as to which appraisal rights have been properly exercised in accordance with Ohio law) will be automatically converted into the right to receive $175.00 in cash, without interest and subject to deduction for any required withholding tax (the “Merger Consideration”). 4 Table of Contents The obligations of the parties to consummate the Merger are subject to the satisfaction or, to the extent permitted, waiver of certain customary closing conditions, including, among others, the adoption of the Merger Agreement by the affirmative vote of a majority of the outstanding DHIL common shares entitled to vote at the DHIL shareholders meeting, the expiration or termination of the waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the absence of any order issued by any court of competent jurisdiction or other governmental authority or applicable law prohibiting, rendering illegal or permanently enjoining the consummation of the Merger.
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The obligations of First Eagle and Merger Sub to consummate the Merger are also subject to the Company obtaining the consent of the Company’s clients generating an aggregate revenue run-rate of at least 78% of the Company’s aggregate revenue run-rate as of November 30, 2025. The Merger is not subject to a financing condition.
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First Eagle currently intends to fund the Merger Consideration with a combination of cash on hand and by drawing on all or a portion of one or more credit facilities.
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Although there can be no assurance that the Merger will be completed, the Company currently expects the Merger to be completed in the second quarter of 2026, subject to the satisfaction or waiver of the closing conditions set forth in the Merger Agreement.
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First Eagle is an independent, privately owned investment management firm headquartered in New York, with approximately $181 billion in AUM as of December 31, 2025. First Eagle focuses on active, fundamental, and benchmark-agnostic investing across equity, fixed income, alternative credit, and multi-asset strategies, with a strong emphasis on downside mitigation.
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Upon completion of the Merger, the Company is expected to continue to operate as a wholly-owned subsidiary of First Eagle. A special meeting of DHIL shareholders (the “Special Meeting”) is scheduled to be held on March 3, 2026 at which shareholders will be asked to vote upon certain merger-related proposals including, among other matters, the adoption of the Merger Agreement.
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For additional information regarding First Eagle and the proposed Merger, including detailed information regarding the terms of the Merger Agreement and related matters, see DHIL’s proxy statement filed with the SEC in connection with the Special Meeting.
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Additional Information Regarding the Merger This Form 10-K does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities. In connection with the Merger, on January 28, 2026, DHIL filed with the SEC a definitive proxy statement on Schedule 14A (the “Merger Proxy Statement”) relating to the Special Meeting.
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This Form 10-K is not a substitute for the Merger Proxy Statement or any other document that DHIL may file with the SEC and send to its shareholders in connection with the Merger. The Merger will be submitted to DHIL’s shareholders for their consideration.
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Before making any voting decision, DHIL’s shareholders are urged to read all relevant documents filed or to be filed with the SEC, including the Merger Proxy Statement, as well as any amendments or supplements to those documents, when they become available, because they will contain important information about DHIL and the Merger.
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DHIL’s shareholders may obtain a free copy of the Merger Proxy Statement, as well as other filings containing information about DHIL, free of charge, at DHIL’s website (www.sec.gov). Copies of the Merger Proxy Statement and other documents filed by DHIL with the SEC may be obtained, without charge, by contacting DHIL through its website at www.diamond-hill.com .
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Accordingly, net cash flows from clients, market fluctuations, and the composition of AUM impact the Company’s revenues and results of operations. Model Delivery Programs - Assets Under Advisement DHCM provides strategy-specific model portfolios to sponsors of model delivery programs.
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DHCM generated approximately 70%, 66%, and 68% of its 2025, 2024, and 2023 revenues, respectively, from its advisory and administration agreements with the Proprietary Funds.
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SEC Filings The Company maintains a website at www.diamond-hill.com .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+57 added−7 removed35 unchanged
Biggest changeIf the Company is unable to identify sufficient investment opportunities for existing and new client assets on a timely basis, its investment results could be adversely affected. The risk that appropriate investment opportunities may be unavailable is influenced by a number of factors, including general market conditions, and is likely to increase if the Company’s AUM increases rapidly.
Biggest changeThe risk that appropriate investment opportunities may be unavailable is influenced by a number of factors, including general market conditions, and is likely to increase if the Company’s AUM increases rapidly. The Company’s efforts to establish and develop new strategies may face challenges or ultimately be unsuccessful, which could impact its results of operations, reputation, and/or culture.
Natural disasters, outbreaks of epidemics or pandemics, terrorist attacks, extreme weather events or other unpredictable events could adversely affect the Company’s revenues, expenses, and net income by: • Decreasing investment valuations in, and returns on, the investment portfolios that the Company manages and its corporate investments, thus, causing reductions in AUM, AUA, and revenue; • Causing disruptions in national or global economies that decrease investor confidence and make investment products generally less attractive; • Reducing the availability of key personnel necessary to conduct the Company’s business activities; • Interrupting the Company’s business operations or those of critical service providers; • Triggering technology delays or failures; and/or • Requiring substantial capital expenditures and operating expenses to restore the Company’s operations.
Natural disasters, outbreaks of epidemics or pandemics, terrorist attacks, extreme weather events, or other unpredictable events could adversely affect the Company’s revenues, expenses, and net income by: • Decreasing investment valuations in, and returns on, the investment portfolios that the Company manages and its corporate investments, thus, causing reductions in AUM, AUA, and revenue; • Causing disruptions in national or global economies that decrease investor confidence and make investment products generally less attractive; • Reducing the availability or productivity of key personnel necessary to conduct the Company’s business activities; • Interrupting the Company’s business operations or those of critical service providers; • Triggering technology delays or failures; and/or • Requiring substantial capital expenditures and operating expenses to restore the Company’s operations.
The Company’s business is subject to a variety of federal securities laws, including the Advisers Act, the Company Act, the Securities Act, the Exchange Act, the Sarbanes-Oxley Act of 2002, the U.S. PATRIOT Act of 2001, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, each as amended.
The Company is subject to a variety of federal securities laws, including the Advisers Act, the Company Act, the Securities Act, the Exchange Act, the Sarbanes-Oxley Act of 2002, the U.S. PATRIOT Act of 2001, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, each as amended.
The Company and its directors, officers, and employees could be subject to lawsuits or regulatory proceedings for violations of such laws and 13 Table of Contents regulations, which could result in the payment of fines or penalties and cause reputational harm to the Company, which could negatively affect its financial condition and results of operations, as well as divert management’s attention from its operations.
The Company and its directors, officers, and employees could be subject to lawsuits or regulatory proceedings for violations of such laws and regulations, which could result in the payment of fines or penalties and cause reputational harm to the Company, which could negatively affect its financial condition and results of operations, as well as divert management’s attention from its operations.
Trading in DHIL common shares is limited, which may adversely affect the time and the price at which shareholders can sell their shares. Although DHIL common shares are listed on The Nasdaq Global Select Market, the shares are held by a relatively small number of shareholders, and trading in its common shares is relatively inactive.
Trading in DHIL common shares is limited, which may adversely affect the time and the price at which shareholders can sell their shares. Although DHIL common shares are listed on The Nasdaq Global Select Market, the shares are held by a relatively small number of shareholders, and trading in its common shares has historically been relatively inactive.
ITEM 1A. Risk Factors The Company’s future results of operations, financial condition, liquidity, and capital resources as well as the market price of its common shares, are subject to various risks, including those risks mentioned below and elsewhere in this Form 10-K as well as those risks that are discussed from time-to-time in the Company’s other filings with the SEC.
Risk Factors The Company’s future results of operations, financial condition, liquidity, and capital resources as well as the market price of its common shares, are subject to various risks, including those risks described below and elsewhere in this Form 10-K as well as those risks that are discussed from time to time in the Company’s other filings with the SEC.
If a Company strategy receives an adverse report, it could negatively impact the Company’s AUM and revenues. The Company’s success depends on its key personnel, and its financial performance could be negatively affected by the loss of their services.
If a Company strategy receives an adverse report, it could negatively impact the Company’s AUM and revenues. 12 Table of Contents The Company’s success depends on its key personnel, and its financial performance could be negatively affected by the loss of their services.
Negative public opinion can result from the Company’s actual or alleged conduct in any number of activities, including trading practices, corporate governance and acquisitions, DEI issues, social media and other marketing activities, and actions taken by governmental regulators and community organizations in response to any of the foregoing.
Negative public opinion can result from the Company’s actual or alleged conduct in any number of activities, including trading practices, corporate governance and acquisitions, diversity, equity and inclusion issues, social media and other marketing activities, and actions taken by governmental regulators and community organizations in response to any of the foregoing.
Negative public opinion of the Company could cause it to lose clients and adversely affect its share price.
Negative public opinion of the Company could impair its reputation, cause it to lose clients and adversely affect its share price.
Whether information is corrupted, stolen, or inadvertently disclosed, and regardless of the type and nature of the information ( e.g. , proprietary information about the Company’s business or personal information about clients or employees), it could have various adverse impacts on, and be materially harmful to, the Company, including the following: • The Company’s reputation could be harmed, resulting in the loss of clients, vendors, and employees or making payments or concessions to such persons to maintain its relationships with them; • The Company’s inability to operate its business fully, even if temporarily, and thus, fulfill contracts with clients or vendors, could result in termination of contracts and loss of revenue; • Harm suffered by clients or vendors whose contracts have been breached, or by clients, vendors, or employees whose information is compromised, could result in costly litigation against the Company; • The Company’s need to focus attention on remediation of a cybersecurity issue could take its attention away from the operation of its business, resulting in lost revenue; 11 Table of Contents • The Company could incur costs to repair systems made inoperable by a cyberattack and to make changes to its systems to reduce future cyber threats.
If information about the Company’s business is obtained by unauthorized persons, whether through intentional attacks or inadvertent releases of information, it could be used to harm its competitive position. 15 Table of Contents Whether information is corrupted, stolen, or inadvertently disclosed, and regardless of the type and nature of the information ( e.g. , proprietary information about the Company’s business or personal information about clients or employees), it could have various adverse impacts on, and be materially harmful to, the Company, including the following: • The Company’s reputation could be harmed, resulting in the loss of clients, vendors, and employees or making payments or concessions to such persons to maintain its relationships with them; • The Company’s inability to operate its business fully, even if temporarily, and thus, fulfill contracts with clients or vendors, could result in termination of contracts and loss of revenue; • Harm suffered by clients or vendors whose contracts have been breached, or by clients, vendors, or employees whose information is compromised, could result in costly litigation against the Company; • The Company’s need to focus attention on remediation of a cybersecurity issue could take its attention away from the operation of its business, resulting in lost revenue; • The Company could incur costs to repair systems made inoperable by a cyberattack and to make changes to its systems to reduce future cyber threats.
A recession or other economic or political events, whether in the United States or globally could also adversely impact the Company’s revenue, if such events led to a decreased demand for products, a higher redemption rate, or a decline in securities prices.
A recession or other economic or political events, whether in the U.S. or globally could also adversely impact the Company’s revenue, if such events led to a decreased demand for products, a higher redemption rate, or a decline in securities prices.
Natural disasters, global pandemics, and other unpredictable events could adversely affect the Company’s operations.
Natural disasters, global pandemics, and other unpredictable events could adversely affect the Company’s operations and financial results.
Negative public opinion could adversely affect the Company’s ability to attract and maintain clients, could expose the Company to potential litigation or regulatory action, and could have a material adverse effect on its share price or result in heightened volatility.
Negative public opinion could adversely affect the Company’s ability to attract and maintain clients, could expose the Company to potential litigation or regulatory action, and could have a material adverse effect on its share price or result in heightened volatility as well as on its revenues and results of operations.
If current or potential clients decide to use one of the Company’s competitors, it could face a significant decline in AUM, AUA, revenues, and net income.
If current or potential clients decide to use one of the Company’s competitors, the Company could face a 13 Table of Contents significant decline in AUM, AUA, revenues, and net income.
As part of its business, the Company collects, processes, and transmits sensitive and confidential information about its clients and employees, as well as proprietary information about its business.
In the ordinary course of its business, the Company collects, processes, and transmits sensitive and confidential information about its clients and employees, as well as proprietary information about its business.
AI-related changes to the products and services on offer may affect customer expectations, requirements, or tastes in ways that the Company cannot adequately anticipate or adapt to, causing its business to lose revenues, market share, or the ability to operate profitably and sustainably. Operational risks may disrupt the Company’s business, result in losses, or limit its growth.
AI-related changes to the products and services on offer may affect customer expectations, requirements, or tastes in ways that the Company cannot adequately anticipate or adapt to, causing its business to lose revenues, market share, or the ability to operate profitably and sustainably.
If the Company’s policies and procedures are not fully effective or it is not successful in capturing all risks to which it is or may be exposed,the Company may suffer harm to its reputation or be subject to litigation or regulatory actions that could have a material adverse effect on its business, results of operations,or financial condition. 12 Table of Contents Industry, Market, and Economic Risks The Company’s AUM, which impacts revenue, is subject to significant fluctuations.
If the Company’s policies and procedures are not fully effective or it is not successful in capturing all risks to which it is or may be exposed, the Company may suffer harm to its reputation or be subject to litigation or regulatory actions that could have a material adverse effect on its business, results of operations, or financial condition.
The Company is subject to federal, state, and local income taxes in the United States. We cannot predict future changes in the tax regulations to which we are subject, and any such changes could have a material impact on our tax liability or result in increased costs of our tax compliance efforts.
The Company is subject to federal, state, and local income taxes in the U.S. The Company cannot predict future changes in the tax regulations to which it may be subject, and any such changes could have a material impact on its tax liability or result in increased costs of its tax compliance efforts.
If the Company misjudged the point at which it would be 9 Table of Contents optimal to close an investment strategy, the investment results of the strategy could be negatively impacted. The Company has closed investment strategies in the past and may do so again in the future.
If the Company misjudged the point at which it would be optimal to close an investment strategy, the investment results of the strategy could be negatively impacted. The Company has closed investment strategies in the past and may do so again in the future. As of December 31, 2025, the Company does not have any closed investment strategies.
AI may lower barriers to entry in the industry and the Company may be unable to effectively compete with the products or services offered by new competitors.
Burgeoning interest in AI may increase competition and disrupt the Company’s business model. AI may lower barriers to entry in the industry and the Company may be unable to effectively compete with the products or services offered by new competitors.
The Company is dependent on the capacity and reliability of the communications, information, and technology systems supporting its operations, whether developed, owned, or operated internally by the Company or by third parties.
Operational risks may disrupt the Company’s business, result in losses, or limit its growth. The Company is dependent on the capacity and reliability of the communications, information, and technology systems supporting its operations, whether developed, owned, or operated internally by the Company or by third parties.
The effective use of technology increases efficiency and enables financial institutions to better serve clients while reducing costs. The Company’s future success depends, in part, upon its ability to address client needs by using technology to provide products and services that will satisfy client demands, as well as to create additional efficiencies in its operations.
The Company’s future success depends, in part, upon its ability to address client needs by using technology to provide products and services that will satisfy client demands, as well as to create additional efficiencies in its operations.
Other than the Company’s Chief Executive Officer, its employees do not have employment contracts and generally can terminate their employment at any time. The Company may not be able to retain or replace key personnel. To retain or replace its key personnel, the Company may be required to increase compensation, which would decrease its net income.
Other than DHIL’s Chief Executive Officer and President (the "CEO") and DHCM's President and Chief Client Officer, Company employees do not have employment contracts and generally can terminate their employment at any time. The Company may not be able to retain or replace key personnel.
There is a risk that these vendors will not be able to perform in an adequate and timely manner. If the Company’s operations or its employees’ ability to perform their duties is temporarily disrupted, or if the Company is unable to respond adequately to such an event in a timely manner, revenues, expenses, and net income could be negatively impacted.
If the Company’s operations or its employees’ ability to perform their duties is temporarily disrupted, or if the Company is unable to respond adequately to such an event in a timely manner, revenues, expenses, and net income could be negatively impacted. 19 Table of Contents ITEM 1B. Unresolved Staf f Comments None.
These competitive advantages may enable its competition to innovate better and more quickly, or to compete more effectively on quality and price, which could cause the Company to lose business and profitability. Burgeoning interest in AI may increase competition and disrupt the Company’s business model.
The Company’s competitors may be larger, more diversified, better funded, and have access to more advanced technology, including generative AI. These competitive advantages may enable the Company's competition to innovate better and more quickly, or to compete more effectively on quality and price, which could cause the Company to lose business and profitability.
Business Risks Poor investment results or adverse ratings of the Company’s products could affect its ability to attract new clients or could reduce its AUM, potentially negatively impacting revenue and net income.
There may also be additional unanticipated significant costs in connection with the Merger that the Company does not anticipate and may not be able to recoup. Business Risks Poor investment results or adverse ratings of the Company’s products could affect its ability to attract new clients or could reduce its AUM, potentially negatively impacting revenue and net income.
The Company currently has a substantial portion of its assets invested in investment strategies that it manages. All of these investments are subject to market risk and the Company’s non-operating investment income could be adversely affected by market performance. Fluctuations in investment income are expected to occur in the future.
All of these investments are subject to market risk and the Company’s non-operating investment income could be adversely affected by market performance. Fluctuations in investment income are expected to occur in the future and may adversely affect the Company's financial condition and results of operations.
The loss of key personnel could damage the Company’s reputation and make it more difficult to retain and attract new employees and clients. A loss of client assets resulting from the departure of key personnel may materially decrease the Company’s revenues and net income.
To retain or replace its key personnel, the Company may be required to increase compensation, which would decrease its net income. The loss of key personnel could damage the Company’s reputation and make it more difficult to retain and attract new employees and clients.
The Company’s investment results and/or growth in its AUM may be constrained if appropriate investment opportunities are not available or if the Company closes certain of its investment strategies to new investors. The Company’s ability to deliver excellent investment results depends in large part on its ability to identify appropriate investment opportunities in which to invest client assets.
A loss of client assets resulting from the departure of key personnel may materially decrease the Company’s revenues and net income. The Company’s investment results and/or growth in its AUM may be constrained if appropriate investment opportunities are not available or if the Company closes certain of its investment strategies to new investors.
Financial market declines will generally negatively impact the level of the Company’s AUM, and consequently, its revenue and net income.
A decline in securities prices or in the sale of investment products, or an increase in client redemptions, generally will reduce revenue and net income. Financial market declines will generally negatively impact the level of the Company’s AUM, and consequently, its revenue and net income.
Investor interest in the Company’s fixed income strategies is affected by changes in interest rates and the overall credit environment. In addition, the majority of the Company’s existing AUM is managed in primarily long-only, equity investment strategies, which exposes it to greater risk than certain of its competitors who may manage assets in more diverse strategies.
In addition, the majority of the Company’s existing AUM is managed in primarily long-only, equity investment strategies, which exposes it to greater risk than certain of its competitors who may manage assets in more diverse strategies. 17 Table of Contents The Company’s investment approach may underperform other investment approaches during certain market conditions, which could lead to client outflows and reduced revenues.
Additionally, the Company has, and is expected to continue to have, common positions and industry concentrations across its strategies at the same time. As such, factors leading to underperformance may impact multiple strategies simultaneously. The Company’s investment income and asset levels may be negatively impacted by fluctuations in its investment portfolio.
As such, factors leading to underperformance may impact multiple strategies simultaneously. The Company’s investment income and asset levels may be negatively impacted by fluctuations in its investment portfolio. The Company currently has a substantial portion of its assets invested in investment strategies that it manages.
Any of the above potential impacts of a cybersecurity incident, individually or collectively, could have a material adverse effect on the Company’s business, financial condition, and results of operations. The Company may not be able to adapt to technological change. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
Any of the above potential impacts of a cybersecurity incident, individually or collectively, could have a material adverse effect on the Company’s business, financial condition, and results of operations. Failure to keep pace with technological change could impair the Company’s competitiveness and growth.
The Company’s business is subject to substantial governmental regulation, which can change frequently and may increase costs of compliance, reduce revenue, result in fines, penalties, and lawsuits for noncompliance, and adversely affect its results of operations and financial condition.
The Company cannot provide assurances, however, that tax authorities will agree with the positions it has taken, or that the Company will accurately predict the outcomes of audits, and the actual outcomes of these audits could be unfavorable. 18 Table of Contents The Company is subject to extensive governmental regulation, which can change frequently and may increase costs of compliance, reduce revenue, result in fines, penalties, and lawsuits for noncompliance, and adversely affect its results of operations and financial condition.
The Company’s investment approach may underperform other investment approaches during certain market conditions. The Company’s investment strategies are best suited for investors with long-term investment time horizons. The Company’s investment strategies may not perform well during certain periods of time.
The Company’s investment strategies are best suited for investors with long-term investment time horizons. The Company’s investment strategies may not perform well during certain periods of time. Additionally, the Company has, and is expected to continue to have, common positions and industry concentrations across its strategies at the same time.
The majority of the Company’s revenue is calculated as a percentage of AUM or is related to the general performance of the equity securities markets. A decline in securities prices or in the sale of investment products, or an increase in client redemptions, generally will reduce revenue and net income.
Industry, Market, and Economic Risks The Company’s AUM, which impacts revenue, is subject to significant fluctuations. The majority of the Company’s revenue is calculated as a percentage of AUM or is related to the general performance of the equity securities markets.
The Diamond Hill Funds’ agreements are subject to annual approval by either: (i) their board of trustees, or (ii) a vote of the majority of the outstanding voting securities of each Diamond Hill Fund. 10 Table of Contents These agreements automatically terminate in the event of their assignment by either DHCM or the Diamond Hill Funds.
DHCM’s advisory and administration agreements with the Proprietary Funds are 14 Table of Contents generally terminable by either party upon 60 days’ prior written notice without penalty and are subject to annual approval by the applicable board of trustees or by a vote of the majority of the outstanding voting securities of each Proprietary Fund.
DHCM generated approximately 66%, 68%, and 71% of its 2024, 2023, and 2022 revenues, respectively, from its advisory and administration agreements with the Diamond Hill Funds, including 29% and 11% from the advisory contracts with the Diamond Hill Large Cap Fund and the Diamond Hill Long-Short Fund during 2024.
A significant portion of DHCM's revenues are based on advisory and administration agreements with the Proprietary Funds that are subject to termination without cause and on short notice. DHCM generated approximately 70%, 66%, and 68% of its revenues during 2025, 2024, and 2023, respectively, from advisory and administration agreements with the Proprietary Funds.
It may not be as successful as its competitors incorporating AI into its business or adapting to a rapidly changing marketplace. The Company’s competitors may be larger, more diversified, better funded, and have access to more advanced technology, including generative AI.
It may not be as successful as its competitors incorporating AI into its business or adapting to a rapidly changing marketplace which could harm its competitive positions and profitability. The Company operates in an intensely competitive environment, and many competitors are investing heavily in AI and related technologies.
As of December 31, 2024, the Company does not have any closed investment strategies. The Company is subject to substantial competition in all aspects of its business.
The Company is subject to substantial competition in all aspects of its business, which could reduce its AUM, AUA, revenues, and profitability.
The loss of either the Diamond Hill Large Cap Fund or Diamond Hill Long-Short Fund contracts would have a material adverse effect on DHCM.
Any material reduction in AUM or revenues associated with the Diamond Hill Large Cap Fund or other significant Proprietary Funds would have a material adverse effect on DHCM’s business, results of operations, and financial condition.
Removed
The Company’s efforts to establish and develop new strategies may face challenges or ultimately be unsuccessful, which could impact its results of operations, reputation, and/or culture.
Added
Risks Related to the Proposed Merger The announcement of the Merger Agreement and pendency of the Merger could adversely affect the Company's business, financial condition, and results of operations.
Removed
Additionally, over the past several years, investors have generally shown a preference for passive investment products over actively managed strategies. If this trend continues, the Company’s AUM, revenues, and net income may be negatively impacted. Industry trends towards lower fee strategies and model portfolio arrangements could adversely impact the Company’s revenues.
Added
In connection with the pending Merger, it is possible that clients, counterparties, vendors, fund boards, and other third parties with whom the Company has relationships may delay, defer, terminate, or renegotiate those relationships as a result of uncertainty regarding the Merger, regardless of whether the Merger is ultimately completed.
Removed
If such fee increases continue, refusal to pay them could restrict the Company’s access to those client bases while paying them could adversely affect its profitability. A significant portion of DHCM's revenues are based on advisory and administration agreements with the Diamond Hill Funds that are subject to termination without cause and on short notice.
Added
In addition, current and prospective employees may experience uncertainty regarding future roles and responsibilities, which could adversely affect the Company’s ability to retain and attract key personnel. Any of these factors could negatively impact Company AUM, AUA, revenues, operating results, and cash flows.
Removed
DHCM is highly dependent on its contractual relationships with the Diamond Hill Funds. If DHCM’s advisory or administration agreements with the Diamond Hill Funds were terminated or not renewed, or were amended or modified to reduce fees, DHCM would be materially and adversely affected. Generally, these agreements are terminable by either party upon 60 days’ prior written notice without penalty.
Added
The Company's investment advisory relationships are subject to client consent requirements, and failure to obtain required consents could adversely affect the Merger and the Company's business. Under the Advisers Act, a change in control of an investment adviser generally results in an “assignment” of advisory agreements, requiring client consent.
Removed
DHCM believes that it has strong relationships with the Diamond Hill Funds and their board of trustees, and it has no reason to believe that these advisory or administration contracts will not be renewed in the future. However, there can be no assurance that the Diamond Hill Funds will choose to continue their relationships with DHCM.
Added
In addition, under the Advisors Act, advisory agreements with registered investment companies require approval by their fund boards and, in some cases, underlying fund shareholders.
Removed
If information about the Company’s business is obtained by unauthorized persons, whether through intentional attacks or inadvertent releases of information, it could be used to harm its competitive position.
Added
One of the closing conditions in the Merger Agreement requires the Company to obtain the consent of clients generating an aggregate revenue run-rate of at least 78% of a defined aggregate 10 Table of Contents revenue run-rate to the assignment of their respective advisory agreements (resulting from the Merger).
Removed
The Company cannot provide assurances, however, that tax authorities will agree with the positions it has taken, or that the Company will accurately predict the outcomes of audits, and the actual outcomes of these audits could be unfavorable.
Added
Failure to obtain the required client consents or fund approvals could prevent completion of the Merger or result in a reduction of AUM or AUA, even if the Merger is completed, which could materially and adversely affect the Company’s business, financial condition and results of operations. Failure to complete the Merger could adversely affect the Company and its shareholders.
Added
If the Merger is not consummated for any reason, the Company may experience negative reactions from the capital markets, clients, employees, and other stakeholders, and the market price of DHIL common shares could decline.
Added
In addition, the Company would remain subject to certain risks and costs incurred in anticipation of the Merger, including professional fees and management distraction, without realizing any of the anticipated benefits of the transaction.
Added
Under certain circumstances specified in the Merger Agreement, DHIL may be required to pay First Eagle a termination fee of $18.0 million if the Merger Agreement is terminated prior to completion of the Merger, including in connection with DHIL’s acceptance of a superior proposal.
Added
If the Merger Agreement had been terminated in connection with a superior proposal during the applicable go-shop period, which ended on January 14, 2026, the termination fee would have been $9.0 million.
Added
Except in the case of fraud, payment of the termination fee and, if applicable, the costs and expenses of First Eagle and interest on such termination fee and expenses, will be First Eagle’s sole and exclusive remedy for such termination.
Added
Additionally, in approving the Merger Agreement, the Board considered a number of factors and potential benefits, including the fact that the Merger Consideration to be received by holders of DHIL common shares represents a significant premium to the market price prior to the announcement of the Merger.
Added
If the Merger is not completed, neither the Company nor the holders of its common shares will realize this benefit of the Merger. Moreover, the Company will have, nevertheless, incurred substantial transaction-related costs and the loss of management time and resources. The Merger Agreement contains numerous closing conditions that may delay or prevent completion of the Merger.
Added
The Merger Agreement provides that the completion of the Merger is subject to the satisfaction or, to the extent permitted, waiver of customary closing conditions, including, among others, the adoption of the Merger Agreement by the affirmative vote of a majority of the shares of DHIL common stock outstanding and entitled to vote thereon, the expiration or termination of the applicable waiting period under the HSR Act and receipt of the requisite client consents based on revenue run rate.
Added
While it is anticipated that the Merger will be consummated by the third quarter of 2026, the closing conditions may not be satisfied in a timely manner or at all, or an effect, event, development, or change could delay or prevent these conditions from being satisfied.
Added
Any delay in satisfying these conditions could delay the completion of the Merger or prevent it from being completed at all. Therefore, the timing of the Merger is uncertain and there can be no assurance that the conditions to closing will be satisfied on the expected timeline, or at all.
Added
The Merger Agreement restricts the Company's ability to operate its business or solicit alternative acquisition proposals prior to completion of the Merger.
Added
From the date of execution of the Merger Agreement until completion of the Merger or termination of the Merger Agreement, the Company is subject to certain customary restrictions on its activities, including limitations on capital expenditures, investments, hiring, compensation actions, and other specified activities.
Added
These restrictions may prevent the Company from pursuing otherwise attractive business opportunities or responding effectively to market developments prior to completion of the Merger, which could adversely affect the Company’s business and operating results, regardless of whether the Merger is completed.
Added
The Company is also subject to customary restrictions on its ability to solicit or engage with third parties on alternative acquisition proposals and the Board’s ability to change its recommendation to shareholders to adopt the Merger Agreement, subject to certain exceptions in accordance with its fiduciary duties.
Added
The Company may be subjected to lawsuits relating to the Merger, which could adversely affect its business, financial condition, and operating results. The Company and DHIL’s directors and officers may become subject to lawsuits relating to the Merger.
Added
Such litigation is very common in connection with mergers and acquisitions of public companies, regardless of the merits of the underlying merger or acquisition. 11 Table of Contents While the Company and its legal counsel will evaluate and defend against any actions vigorously, the costs of the defense of such lawsuits and other effects of such litigation could have an adverse effect on the Company’s business, financial condition, and operating results.
Added
Certain directors and executive officers have interests in the Merger that may differ from, or be in addition to, the interests of shareholders.
Added
The Company’s directors and executive officers have interests in the Merger that may differ from, or be in addition to, those of shareholders generally, including, among others, vesting of equity awards, potential severance benefits, and continued indemnification and insurance coverage.
Added
These interests may create conflicts of interest in connection with the consideration and approval of the Merger and may influence their actions or recommendations regarding the transaction. The Company will become a private company following completion of the Merger, which will reduce transparency and eliminate shareholders' ability to participate in future growth.
Added
If the Merger is completed, DHIL common shares will be de-listed from Nasdaq and de-registered under the Exchange Act, and the Company will no longer be required to file periodic reports with the SEC.
Added
Former shareholders will no longer have an opportunity to benefit from future appreciation in the value of the Company and will have no voting rights or ability to influence management or corporate governance following completion of the Merger. The Company may not realize anticipated benefits of the Merger and integration risks may adversely affect the business following completion.
Added
Although the Company expects the Merger to provide strategic and operational benefits to the Company, the realization of these benefits will depend on, among other things, successful integration of the Company into First Eagle’s organization, retention of key investment professionals and clients, and alignment of business practices and systems.
Added
Integration efforts may be costly, time-consuming, and disruptive, and management’s attention may be diverted from ongoing operations. If these challenges are not successfully managed, the anticipated benefits of the Merger may not be realized or may be realized more slowly than expected. The Company has incurred, and expects to continue to incur, substantial transaction costs in connection with the Merger.
Added
In connection with the Merger, the Company has incurred, and expects to continue to incur, significant costs and expenses, including financial advisory, legal, accounting, consulting, other advisory fees and expenses, and other related charges and costs.
Added
The Company will not be able to quantify the exact amount of these costs, charges, and expenses or the period in which they will be incurred until after the Merger is completed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−1 removed3 unchanged
Biggest changeThe Committee engages third-party experts to perform penetration tests on a periodic basis and to assess whether these policies and procedures are designed appropriately and operating effectively. Cybersecurity oversight forms part of the Board’s risk oversight of the Company. The Board oversees efforts by management to manage the cybersecurity risks to which the Company may be exposed.
Biggest changeThe Company’s cybersecurity policies and procedures have been independently certified by a third party as compliant with the ISO 27001 standard on an annual basis. The Committee engages third-party experts to perform penetration tests on a periodic basis and to assess whether these policies and procedures are designed appropriately and operating effectively.
In 2024, the Company did not identify any cybersecurity risks that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition. However, despite its efforts, the Company cannot eliminate all risks from cybersecurity threats or incidents, or provide assurances that it has not experienced an undetected cybersecurity incident.
In 2025, the Company did not identify any cybersecurity risks that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition. However, despite its efforts, the Company cannot eliminate all risks from cybersecurity threats or incidents, or provide assurances that it has not experienced an undetected cybersecurity incident.
ITEM 1C. Cybersecurity The Company is subject to several material risks related to cybersecurity threats. A cybersecurity attack could prevent the Company from managing client portfolios, cause the unauthorized disclosure of sensitive or confidential client or employee information, and/or result in misappropriation of information or funds, which individually or collectively could severely harm its business.
ITEM 1C. Cybe rsecurity The Company is subject to several material risks related to cybersecurity threats. A cybersecurity attack could prevent the Company from managing client portfolios, cause the unauthorized disclosure of sensitive or confidential client or employee information, and/or result in misappropriation of information or funds, which individually or collectively could severely harm its business.
The Committee identifies and assesses risks by understanding and evaluating the Company’s systems, processes, data, and controls. This information is then augmented through participation by certain 14 Table of Contents Committee members in industry threat intelligence groups designed to share best practices and emerging threats related to cybersecurity.
The Committee identifies and assesses risks by understanding and evaluating the Company’s systems, processes, data, and controls. This information is then augmented through participation by certain Committee members in industry threat intelligence groups designed to share best practices and emerging threats related to cybersecurity.
The Board receives quarterly reports and meets periodically with the Committee chair. From its review of these reports and discussions with management and the Committee chair, the Board ensures it has sufficient awareness of the material cybersecurity risks to which the Company is exposed, enabling a dialogue about how management manages and mitigates those risks.
From its review of these reports and discussions with management and the Committee chair, the Board ensures it has sufficient awareness of the material cybersecurity risks to which the Company is exposed, enabling a dialogue about how management manages and mitigates those risks. The Board currently has four members who have obtained certifications in cybersecurity oversight.
The policies and procedures within the program, among other things, are to oversee, identify, and mitigate the Company’s cybersecurity risks as well as cybersecurity risks to the Company associated with its significant service providers and vendors. The Company’s cybersecurity policies and procedures have been independently certified by a third party as compliant with the ISO 27001 standard.
The policies and procedures within the program, among other things, are to oversee, identify, and mitigate the Company’s cybersecurity risks as well as cybersecurity risks to the Company associated with its significant service providers and vendors.
Removed
The Board currently has four members who have obtained certifications in cybersecurity oversight.
Added
Cybersecurity oversight forms part of the Board ’s risk oversight of the Company. The Board oversees efforts by management to manage the cybersecurity risks to which the Company may be exposed. The Board receives quarterly reports and meets periodically with the Committee chair.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Properties The Company leases office space and conducts its general operations at one location, the address of which is 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215. The Company does not own any real estate or interests in real estate.
Biggest changeITEM 2. Pro perties The Company leases office space and conducts its general operations at one location, the address of which is 325 John H. McConnell Boulevard, Suite 200, Columbus, Ohio 43215. The Company does not own any real estate or interests in real estate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. Legal Proceedings The Company is not aware of any pending legal proceedings that the Company believes will have, individually or in the , a material adverse effect on its consolidated financial statements. ITEM 4. Mine Safety Disclosures Not applicable. 15 Table of Contents PART II
Biggest changeITEM 3. Legal Pr oceedings The Company is not aware of any pending legal proceedings that the Company believes will have, individually or in the aggregate, a material adverse effect on its consolidated financial statements. ITEM 4. Mine Safety Disclosures Not applicable. 20 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

17 edited+3 added−2 removed4 unchanged
Biggest changeThe Company does not make or endorse any predictions as to future share performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Cumulative 5 Year Total Return Diamond Hill Investment Group, Inc. $100 $115 $167 $168 $156 $151 51 % Russell 2000 Index $100 $120 $138 $110 $128 $143 43 % Russell 2000 Asset Managers & Custodians Index (a) $100 $134 $170 $132 $182 $239 139 % 16 Table of Contents (a) The R2000 A&C Index used to calculate the returns includes the following companies by year: 2020 2021 2022 2023 2024 Arlington Asset Investment Corp.
Biggest changeThis performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our other filings under the Securities Act or the Exchange Act. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Cumulative 5 Year Total Return Diamond Hill Investment Group, Inc. $ 100 $ 146 $ 146 $ 136 $ 132 $ 153 53 % Russell 2000 Index $ 100 $ 115 $ 91 $ 107 $ 119 $ 134 34 % Russell 2000 Asset Managers & Custodians Index (a) $ 100 $ 127 $ 99 $ 136 $ 178 $ 177 77 % (a) The R2000 A&C Index used to calculate the returns includes the following companies by year: 21 Table of Contents 2021 2022 2023 2024 2025 Arlington Asset Investment Corp.
The graph assumes that the value of the investment in DHIL common shares and each index was $100 on December 31, 2019. Total return includes reinvestment of all dividends. The Russell 2000 Index measures the performance of approximately 2,000 small-cap U.S. equities, and was selected as a broad equity market index comprised of companies with comparable market capitalization to DHIL.
The graph assumes that the value of the investment in DHIL common shares and each index was $100 on December 31, 2020. Total return includes reinvestment of all dividends. The Russell 2000 Index measures the performance of approximately 2,000 small-cap U.S. equities, and was selected as a broad equity market index comprised of companies with comparable market capitalization to DHIL.
Because repurchases under DHIL’s Rule 10b5-1 trading 18 Table of Contents arrangement are subject to specified parameters and certain price, timing, and volume restraints specified in the plan, there is no guarantee as to the exact number of common shares that will be repurchased or that there will be any repurchases at all pursuant to the plan.
Because repurchases under DHIL’s Rule 10b5-1 trading arrangement are subject to specified parameters and certain price, timing, and volume restraints specified in the plan, there is no guarantee as to the exact number of common shares that will be repurchased or that there will be any repurchases at all pursuant to the plan.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities The following performance graph compares the cumulative total shareholder return of an investment in DHIL common shares to that of the Russell 2000 Index and the Russell 2000 Asset Managers & Custodians Index (the “R2000 A&C Index”) for the five-year period ended December 31, 2024.
Market for Registrant’s Co mmon Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities The following performance graph compares the cumulative total shareholder return of an investment in DHIL common shares to that of the Russell 2000 Index and the Russell 2000 Asset Managers & Custodians Index (the “R2000 A&C Index”) for the five-year period ended December 31, 2025.
Artisan Partners Asset Management, Inc. Artisan Partners Asset Management, Inc. Blucora, Inc. Artisan Partners Asset Management, Inc. BrightSphere Investment Group Inc Ares Management Corporation Blucora, Inc. Brookfield Business Corp. Avantax, Inc. Brookfield Business Corp. BrightSphere Investment Group, Inc. BrightSphere Investment Group, Inc. BrightSphere Investment Group, Inc. Brookfield Business Corp. Burford Capital Limited Cohen & Steers, Inc. Cohen & Steers, Inc.
Artisan Partners Asset Management, Inc. Blucora, Inc. Artisan Partners Asset Management, Inc. BrightSphere Investment Group Inc Brookfield Business Corp. Blucora, Inc. Brookfield Business Corp. Avantax, Inc. Brookfield Business Corp. Burford Capital Limited BrightSphere Investment Group, Inc. BrightSphere Investment Group, Inc. Brookfield Business Corp. Burford Capital Limited Cohen & Steers, Inc. Cohen & Steers, Inc. Cohen & Steers, Inc.
Oppenheimer Holdings Inc. PJT Partners, Inc. Perella Weinberg Partners Victory Capital Holdings, Inc. Pzena Investment Management, Inc. PJT Partners, Inc. Perella Weinberg Partners P10, Inc. Virtus Investment Partners, Inc. Silvercrest Asset Management Group Inc. Pzena Investment Management, Inc. Pzena Investment Management, Inc. Silvercrest Asset Management Group Inc. WisdomTree, Inc. Sculptor Capital Management, Inc. Silvercrest Asset Management Group Inc.
Perella Weinberg Partners Victory Capital Holdings, Inc. Virtus Investment Partners, Inc. PJT Partners, Inc. Perella Weinberg Partners P10, Inc. Virtus Investment Partners, Inc. Westwood Holdings Group, Inc. Pzena Investment Management, Inc. Pzena Investment Management, Inc. Silvercrest Asset Management Group Inc. WisdomTree, Inc. WisdomTree, Inc. Silvercrest Asset Management Group Inc. Silvercrest Asset Management Group Inc. Sculptor Capital Management, Inc.
Focus Financial Partners, Inc. Federated Hermes, Inc. Hamilton Lane Incorporated Focus Financial Partners, Inc. Focus Financial Partners, Inc. GAMCO Investors, Inc. Focus Financial Partners, Inc. Patria Investments Ltd. GAMCO Investors, Inc. GAMCO Investors, Inc. GCM Grosvenor, Inc. GCM Grosvenor, Inc. PJT Partners, Inc. Greenhill & Co., Inc. GCM Grosvenor, Inc. Greenhill & Co., Inc.
Federated Hermes, Inc. Hamilton Lane Incorporated P10, Inc. Focus Financial Partners, Inc. GAMCO Investors, Inc. Focus Financial Partners, Inc. Patria Investments Ltd. Patria Investments Ltd. GAMCO Investors, Inc. GCM Grosvenor, Inc. GCM Grosvenor, Inc. PJT Partners, Inc. Perella Weinberg Partners GCM Grosvenor, Inc. Greenhill & Co., Inc. Hamilton Lane Incorporated Perella Weinberg Partners PJT Partners, Inc. Greenhill & Co., Inc.
During the quarter ended December 31, 2024, the Company withheld 10,475 DHIL common shares for employee tax withholding obligations at an average price paid per share of $161.61. (b) On May 10, 2023, the Board approved a repurchase plan, authorizing management to repurchase up to $50.0 million DHIL common shares (“2023 Repurchase Program”).
During the quarter ended December 31, 2025, the Company withheld 687 DHIL common shares for employee tax withholding obligations at an average price paid per share of $140.01. (b) On May 10, 2023, the Board approved a repurchase plan, authorizing management to repurchase up to $50.0 million DHIL common shares (“2023 Repurchase Program”).
Silvercrest Asset Management Group Inc. Sculptor Capital Management, Inc. StepStone Group, Inc. Sculptor Capital Management, Inc. Sculptor Capital Management, Inc. StepStone Group, Inc. Virtus Investment Partners, Inc. StepStone Group, Inc. StepStone Group, Inc. Victory Capital Holdings, Inc. Waddell & Reed Financial, Inc. Virtus Investment Partners, Inc. Victory Capital Holdings, Inc. Virtus Investment Partners, Inc. Westwood Holdings Group, Inc.
Sculptor Capital Management, Inc. Sculptor Capital Management, Inc. StepStone Group, Inc. StepStone Group, Inc. StepStone Group, Inc. Victory Capital Holdings, Inc. Virtus Investment Partners, Inc. Victory Capital Holdings, Inc. Virtus Investment Partners, Inc. Waddell & Reed Financial, Inc. Virtus Investment Partners, Inc. WisdomTree, Inc. Westwood Holdings Group, Inc. WisdomTree, Inc.
Arlington Asset Investment Corp. Associated Capital Group, Inc. Associated Capital Group, Inc. AlTi Global, Inc. Associated Capital Group, Inc. Associated Capital Group, Inc. AssetMark Financial Holdings, Inc. AlTi Global, Inc. AssetMark Financial Holdings, Inc. AssetMark Financial Holdings, Inc. AssetMark Financial Holdings, Inc. Artisan Partners Asset Management, Inc. AssetMark Financial Holdings, Inc. Artisan Partners Asset Management, Inc.
Associated Capital Group, Inc. Associated Capital Group, Inc. AlTi Global, Inc. Acadian Asset Management., Inc. Associated Capital Group, Inc. AssetMark Financial Holdings, Inc. AlTi Global, Inc. AssetMark Financial Holdings, Inc. AlTi Global, Inc. AssetMark Financial Holdings, Inc. Artisan Partners Asset Management, Inc. AssetMark Financial Holdings, Inc. Artisan Partners Asset Management, Inc. Artisan Partners Asset Management, Inc.
The following table sets forth the high and low daily close prices during each quarter of 2024 and 2023: 2024 2023 High Price Low Price Quarterly Dividend Per Share High Price Low Price Quarterly Dividend Per Share Quarter ended: March 31 $ 166.53 $ 144.68 $ 1.50 $ 191.47 $ 158.38 $ 1.50 June 30 $ 159.18 $ 138.79 $ 1.50 $ 178.18 $ 156.32 $ 1.50 September 30 $ 163.24 $ 139.35 $ 1.50 $ 187.24 $ 161.40 $ 1.50 December 31 $ 171.89 $ 150.15 $ 1.50 $ 171.99 $ 147.81 $ 1.50 Due to the relatively low trading volume of DHIL’s common shares, bid/ask spreads can be wide at times, and therefore, quoted prices may not be indicative of the price a shareholder may receive in an actual transaction.
The following table sets forth the high and low daily close prices during each quarter of 2025 and 2024: 2025 2024 High Low Quarterly Dividend High Low Quarterly Dividend Price Price Per Share Price Price Per Share Quarter ended: March 31 $ 156.59 $ 142.84 $ 1.50 $ 166.53 $ 144.68 $ 1.50 June 30 $ 145.80 $ 125.49 $ 1.50 $ 159.18 $ 138.79 $ 1.50 September 30 $ 158.38 $ 133.40 $ 1.50 $ 163.24 $ 139.35 $ 1.50 December 31 $ 170.00 $ 114.83 $ 5.50 $ 171.89 $ 150.15 $ 1.50 Due to the relatively low trading volume of DHIL’s common shares, bid/ask spreads can be wide at times, and therefore, quoted prices may not be indicative of the price a shareholder may receive in an actual transaction.
Hamilton Lane Incorporated Perella Weinberg Partners Hamilton Lane Incorporated Greenhill & Co., Inc. Hamilton Lane Incorporated Oppenheimer Holdings Inc. P10, Inc. Morgan Group Holding Co. Hamilton Lane Incorporated Manning & Napier, Inc. Patria Investments Ltd. Silvercrest Asset Management Group Inc. Oppenheimer Holdings Inc. MMA Capital Holdings, Inc. Oppenheimer Holdings Inc. PJT Partners, Inc. StepStone Group, Inc. PJT Partners, Inc.
Hamilton Lane Incorporated Oppenheimer Holdings Inc. P10, Inc. Silvercrest Asset Management Group Inc. Hamilton Lane Incorporated Manning & Napier, Inc. Patria Investments Ltd. Silvercrest Asset Management Group Inc. StepStone Group, Inc. MMA Capital Holdings, Inc. Oppenheimer Holdings Inc. PJT Partners, Inc. StepStone Group, Inc. Victory Capital Holdings, Inc. Oppenheimer Holdings Inc. PJT Partners, Inc.
Cohen & Steers, Inc. BrightSphere Investment Group, Inc. Cohen & Steers, Inc. Cowen Inc Cowen Inc Diamond Hill Investment Group, Inc. Cohen & Steers, Inc. Diamond Hill Investment Group, Inc. Diamond Hill Investment Group, Inc. Diamond Hill Investment Group, Inc. Federated Hermes, Inc. Diamond Hill Investment Group, Inc. GCM Grosvenor, Inc. Federated Hermes, Inc. Federated Hermes, Inc.
BrightSphere Investment Group, Inc. Cohen & Steers, Inc. Diamond Hill Investment Group, Inc. Cowen Inc Diamond Hill Investment Group, Inc. Cohen & Steers, Inc. Diamond Hill Investment Group, Inc. GCM Grosvenor, Inc. Diamond Hill Investment Group, Inc. Federated Hermes, Inc. Diamond Hill Investment Group, Inc. GCM Grosvenor, Inc. Hamilton Lane Incorporated Federated Hermes, Inc. Focus Financial Partners, Inc.
Waddell & Reed Financial, Inc. Virtus Investment Partners, Inc. WisdomTree, Inc. WisdomTree Investments, Inc. Westwood Holdings Group, Inc. WisdomTree, Inc. WisdomTree Investments, Inc. 17 Table of Contents DHIL’s common shares trade on The Nasdaq Global Select Market under the ticker symbol DHIL.
WisdomTree Investments, Inc. 22 Table of Contents DHIL’s common shares trade on The Nasdaq Global Select Market under the ticker symbol DHIL.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information regarding repurchases of DHIL common shares during the quarter ended December 31, 2024: Period Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as part of Publicly Announced Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (b) October 1, 2024 through October 31, 2024 10,475 161.61 — $ 4,739,260 November 1, 2024 through November 30, 2024 22,556 $ 168.33 22,556 46,203,126 December 1, 2024 through December 31, 2024 30,243 $ 156.95 30,243 41,456,564 Total 63,274 52,799 $ 41,456,564 (a) The Company regularly withholds common shares for tax payments due upon the vesting of employee restricted shares.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information regarding repurchases of DHIL common shares during the quarter ended December 31, 2025: Period Total Number of Common Shares Purchased (a) Average Price Paid Per Common Share Total Number of Common Shares Purchased as part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) October 1, 2025 through October 31, 2025 17,864 $ 138.90 17,177 $ 24,571,801 November 1, 2025 through November 30, 2025 — $ — — 24,571,801 December 1, 2025 through December 31, 2025 — $ — — 24,571,801 Total 17,864 $ 138.90 17,177 $ 24,571,801 (a) The Company regularly withholds common shares for tax payments due upon the vesting of employee restricted shares.
Purchases under the 2024 Repurchase Program may be made in the open market or through privately negotiated transactions. Purchases in the open market are intended to comply with Rule 10b-18 under the Exchange Act. Sale of Unregistered Securities During the quarter ended December 31, 2024, DHIL did not sell any common shares that were not registered under the Securities Act.
Purchases under the 2024 Repurchase Program may be made in the open market or through privately negotiated transactions. Purchases in the open market are intended to comply with Rule 10b-18 under the Exchange Act.
The approximate number of beneficial holders of DHIL common shares held by brokers, banks, and other intermediaries was greater than 8,000 as of February 26, 2025.
During 2025 and 2024, approximately 7,130,745 and 4,335,746, of DHIL’s common shares were traded, respectively. The approximate number of record holders of DHIL common shares as of February 26, 2026 was 70. The approximate number of beneficial holders of DHIL common shares held by brokers, banks, and other intermediaries was approximately 10,750 as of December 31, 2025.
Removed
During 2024 and 2023, approximately 4,335,746 and 3,143,990, of DHIL’s common shares were traded, respectively. Each fiscal quarter, the Board determines whether to approve and pay a regular quarterly dividend. In addition to the regular quarterly dividends, in the fourth quarter of each fiscal year, the Board decides whether to approve and pay a special dividend.
Added
The Company does not make or endorse any predictions as to future share performance.
Removed
Although DHIL currently expects to pay regular quarterly dividends, depending on the circumstances and the Board’s judgment, DHIL may not pay quarterly or special dividends. DHIL has not paid a special dividend since 2022. The approximate number of record holders of DHIL common shares as of February 26, 2025 was 70.
Added
During 2025, DHIL paid a quarterly cash dividend of $1.50 per common share and a special dividend of $4.00 per common share in the fourth quarter. Pursuant to the Merger Agreement, DHIL will not pay a dividend pending the closing of the Merger.
Added
In accordance with the Merger Agreement, DHIL will not repurchase its common shares under the 2024 Repurchase Program pending the closing of the Merger. 23 Table of Contents Sale of Unregistered Securities During the quarter ended December 31, 2025, DHIL did not sell any common shares that were not registered under the Securities Act.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Removed
Item 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8. Financial Statements and Supplementary Data 38 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 58 Item 9A. Controls and Procedures 58 Item 9B.
Added
ITEM 6. [Res erved] ITE M 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations In this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), the Company discusses and analyzes its consolidated results of operations for the past three fiscal years and other factors that may affect its future financial performance.
Added
This discussion should be read in conjunction with the Company’s consolidated financial statements and notes to consolidated financial statements contained in this Form 10-K. Certain statements the Company makes under this MD&A constitute “forward-looking statements” under the PSLR Act. See “Cautionary Note Regarding Forward-Looking Statements” in Part I, Item 1.
Added
You should also consider the Company’s forward-looking statements in light of the risks discussed in Part I, Item 1A, as well as the Company’s consolidated financial statements, related notes and other financial information appearing elsewhere in this Form 10-K and its other filings with the SEC.
Added
Business Environment 1 The performances of the U.S. and international equity markets, as well as the U.S. fixed income market, has a direct impact on the Company’s operations and financial position.
Added
Returns of several major equity and fixed income market indexes for 2025 were as follows: 2025 Russell 1000 Index 17.37 % Russell 2000 Index 12.81 % Russell 3000 Index 17.15 % MSCI ACWI ex USA Index 32.39 % Bloomberg Barclays U.S. Aggregate Index 7.30 % Bloomberg Barclays U.S. 1-3 Yr.
Added
Gov./Credit Index 5.35 % Equity Market Conditions The U.S. equity markets experienced gains in 2025. The Russell 3000 Index rose 17.15%, driven by large-cap stocks rising 17.37%, while mid-cap stocks gained 10.60% and small-cap stocks increased 12.81%. Growth stocks outperformed value stocks for the third consecutive year, continuing the trend observed for most of the last decade.
Added
The Russell 1000 Growth Index (R1000G) returned 18.56%, exceeding the Russell 1000 Value Index (R1000V) by 2.65%, percentage points (15.91%). While growth stocks were still ahead, this difference was significantly less than in each of the prior two years.
Added
The performance gap was similarly narrower in smaller capitalization stocks, with the Russell 2000 Growth Index outperforming the Russell 2000 Value Index by less than a percentage point. The MSCI ACWI ex-U.S. Index increased 32.39% in 2025, marking a third consecutive year of gains and for the first time since 2022, outperformed U.S.
Added
Equity markets. 1 All net asset and flow data stated in this MD&A are sourced from Morningstar, Inc. © 2025/2026 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely.
Added
Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is not a guarantee of future results. 24 Table of Contents Fixed Income Market Conditions The Bloomberg U.S. Aggregate Bond index returned 7.30% during 2025, the best annual performance for the index since 2020.
Added
After lowering the federal funds rate by 100 basis points in 2024 the Board of Governors of the Federal Reserve System cut rates three times in 2025 for a total decrease of 75 basis points. Inflation ended the year slightly lower at 2.6% compared to year end 2024 at 2.9%.
Added
The 2-year Treasury yield fell 77 basis points during the year from 4.25% to 3.48% while the 30-year Treasury yield increased 6.2 basis points from 4.78% to 4.84%, pushing the spread between the two to 137 basis points, the highest level since 2021.
Added
Investment Flows and Market Trends Total mutual fund and ETF inflows reached $765 billion in 2025, the second-highest annual inflow recorded in the past 25 years. Passively managed strategies accounted for $951 billion in inflows, while actively managed funds experienced $186 billion in outflows.
Added
Investors allocated $1.5 trillion to ETFs, while mutual funds saw $693 billion in outflows, continuing a multi-year trend of preference for ETFs. Within U.S. equities, the share of actively managed fund assets has declined from 47% in 2020 to 35% in 2025. Large-cap ETFs received $556 billion in inflows, while large-cap mutual funds saw $448 billion in outflows.
Added
International equity funds brought in $57 billion, the highest amount of inflows since 2021, following stronger relative returns of international equities compared to U.S. stocks. In fixed income, taxable bond funds had a record $541 billion in inflows, which represented over 70% of total mutual fund and ETF flows.
Added
The conservative Ultrashort Bond category took in $105 billion of these flows reflecting investor’s fears of inflation and market volatility. The market for actively managed ETFs continued to expand with hundreds of new products introduced and multiple mutual funds converted into ETFs.
Added
Active ETFs brought in $453 billion in inflows, representing 45% of total ETF flows, a significant increase from prior years. Shifts in Investment Vehicles and Distribution Investment vehicle preferences continued to change, with increased use of SMAs and model delivery programs. These options offer tax efficiency and customization, leading to broader adoption among institutional and high-net-worth investors.
Added
Other investment structures, such as closed-end registered investment companies, CITs, private funds, and other pooled vehicles, remain relevant. Private market allocations within both retail and institutional investor portfolios have continued to grow. Investment Results It is imperative that the Company generate strong long-term investment results.
Added
Strong investment performance is the key driver of long-term success and meaningfully influences the Company’s ability to attract and retain clients. The equity strategies offered by the Company have generally tended to deliver attractive absolute returns, but the market environment over the last few years has made relative performance more challenging.
Added
Trailing returns presented in the format below tend to be highly end-point sensitive, which means short periods of sharp underperformance can weigh on a strategy’s long-term track record.
Added
Because the Large Cap Composite represents 49% of Firm assets, its recent underperformance in the second half of 2025 has had a significant impact on several rows in the summary table below. 25 Table of Contents Below is a summary of the performance of the Proprietary Funds compared to their respective Morningstar categories and the Company’s investment strategy composite returns compared to their respective benchmarks.
Added
Note that a number of the Company’s strategies do not yet have a 10-year track record.
Added
To see more detail, a table is included below these illustrations which provides information on inception date, performance since inception, and the U.S. equity strategies' performance relative to the Core and Value benchmarks. 1 Year 3 Year 5 Year 10 Year Inception % Funds Outperform Morningstar Category Average 66.7 % 55.6 % 66.7 % 33.3 % 88.9 % % Assets Outperform Morningstar Category Average 38.7 % 60.1 % 60.9 % 28.2 % 99.6 % % Composites Outperform Performance Benchmark 57.1 % 46.2 % 70.0 % 14.3 % 78.6 % % Assets Outperform Performance Benchmark 44.7 % 33.5 % 44.0 % 0.6 % 82.9 % % Composites Outperform Supplemental Benchmark 28.6 % 28.6 % 42.9 % 14.3 % 57.1 % % Assets Outperform Supplemental Benchmark 18.0 % 4.9 % 18.0 % 3.4 % 25.6 % Source: © 2025 Morningstar, Inc.
Added
All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Added
Past performance is not a guarantee of future results. The total number of funds included in the 1-, 3-, 5-, and 10-year periods are 9, 9, 9, and 6, respectively. The percentage of Proprietary Fund assets that outperform is based on the Proprietary Fund assets as of December 31, 2025.
Added
Total fund assets for the 1-, 3-, 5-, and 10-year periods are $18.5 billion, $18.5 billion, $18.5 billion, and $10.4 billion, respectively, which represents between 35% and 63% of total Company assets for each period.
Added
The percentage of the Company’s composites that outperform their benchmark includes all its composites (excluding Long-Duration Treasury) versus the performance benchmark for each composite, except for the Long-Short Composite which uses a blended index that is a 60%/40% weighted blend of the Russell 1000 Index and the Bloomberg U.S. Treasury Bills 1-3 Month Index as of December 31, 2024.
Added
The percentage of composite assets that outperform is based on total Company composite assets as of December 31, 2025, excluding wrap fee accounts and restricted accounts. Composite net returns are calculated using the highest applicable standard separate account fee schedule.
Added
Total composite assets for the 1-, 3-, 5-, and 10-year periods are $26.9 billion, $26.8 billion, $26.4 billion, and $17.9 billion, respectively, which represents between 61% and 92% of total Company assets for each period. 26 Table of Contents While the Company’s equity-focused strategies use core benchmarks to evaluate investment performance over full market cycles, many clients also compare the Company's results to value benchmarks.
Added
The following is a summary of the investment returns for each of the Company’s strategies as of December 31, 2025, relative to their respective core and value indices, as applicable. As of December 31, 2025 U.S.
Added
Equity Composites Inception 1 Year 3 Year 5 Year 10 Year Since Inception Diamond Hill Large Cap 6/30/2001 5.55 % 10.37 % 7.94 % 10.22 % 8.98 % Russell 1000 Index 17.37 % 22.74 % 13.59 % 14.59 % 9.41 % Russell 1000 Value Index 15.91 % 13.90 % 11.33 % 10.53 % 7.92 % Diamond Hill Large Cap Concentrated 12/31/2011 8.56 % 13.10 % 9.75 % 11.46 % 11.91 % Russell 1000 Index 17.37 % 22.74 % 13.59 % 14.59 % 9.41 % Russell 1000 Value Index 15.91 % 13.90 % 11.33 % 10.53 % 7.92 % Diamond Hill Mid Cap 12/31/2013 13.47 % 11.31 % 9.51 % 8.66 % 7.92 % Russell Midcap Index 10.60 % 14.36 % 8.67 % 11.01 % 10.00 % Russell Midcap Value Index 11.05 % 12.27 % 9.83 % 9.78 % 8.89 % Diamond Hill Small-Mid Cap 12/31/2005 8.54 % 9.44 % 8.26 % 8.02 % 8.33 % Russell 2500 Index 11.91 % 13.75 % 7.26 % 10.40 % 8.97 % Russell 2500 Value Index 12.73 % 13.21 % 10.02 % 9.72 % 8.10 % Diamond Hill Small Cap 12/31/2000 11.93 % 16.08 % 12.16 % 8.85 % 10.11 % Russell 2000 Index 12.81 % 13.73 % 6.09 % 9.62 % 8.21 % Russell 2000 Value Index 12.59 % 11.73 % 8.88 % 9.27 % 8.61 % Diamond Hill Select 6/30/2000 13.64 % 18.86 % 13.17 % 12.48 % 10.73 % Russell 3000 Index 17.15 % 22.25 % 13.15 % 14.29 % 8.31 % Russell 3000 Value Index 15.71 % 13.77 % 11.18 % 10.46 % 8.10 % Diamond Hill Micro Cap 9/30/2021 31.20 % 27.07 % N/A N/A 18.42 % Russell Micro Cap Index 22.98 % 15.20 % N/A N/A 3.58 % Alternative Composites Diamond Hill Long-Short 6/30/2000 19.86 % 14.59 % 10.76 % 8.70 % 7.82 % 60% Russell 1000 Index / 40% BofA ML U.S.
Added
T-Bill 0-3 Month Index 12.12 % 15.50 % 9.64 % 9.78 % 6.01 % International Composites Diamond Hill International 12/31/2016 28.41 % 16.47 % 9.08 % N/A 10.26 % MSCI ACWI ex USA Index 32.39 % 17.33 % 7.91 % N/A 8.86 % Fixed Income Composites Diamond Hill Short Duration Securitized Bond 7/31/2016 6.67 % 8.34 % 4.80 % N/A 4.29 % Bloomberg Barclays U.S. 1-3 Yr.
Added
Gov./Credit Index 5.35 % 4.77 % 1.97 % N/A 2.04 % Diamond Hill Core Bond 7/31/2016 7.38 % 5.89 % 0.77 % N/A 2.46 % Bloomberg Barclays U.S.
Added
Aggregate Index 7.30 % 4.66 % (0.36 )% N/A 1.51 % Diamond Hill Securitized Credit Composite 10/31/2024 12.87 % N/A N/A N/A 13.15 % Diamond Hill Core Plus Composite 12/31/2024 8.30 % N/A N/A N/A 8.30 % Bloomberg US Aggregate Bond Index 7.30 % N/A N/A N/A 7.30 % - Composite returns are net of fees. - Index returns do not reflect any fees. 27 Table of Contents Key Financial Performance Indicators There are a variety of key performance indicators that the Company monitors to evaluate its business results.
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The following table presents the results of certain key performance indicators over the past three fiscal years: For the Years Ended December 31, 2025 2024 2023 Ending AUM and AUA (in millions) $ 30,962 $ 31,925 $ 29,164 Average AUM and AUA (in millions) 31,836 31,610 27,321 Net cash outflows (in millions) (2,741 ) (289 ) (494 ) Total revenue (in thousands) 147,098 151,095 136,716 Net operating income 36,736 43,892 35,504 Adjusted net operating income (a) $ 43,046 $ 48,696 $ 41,434 Average advisory fee rate 0.44 % 0.45 % 0.47 % Net operating profit margin 25 % 29 % 26 % Adjusted net operating profit margin (a) 29 % 32 % 30 % (a) Adjusted net operating income and adjusted net operating profit margin are non-GAAP financial measures.
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See the “Non-GAAP Financial Measures and Reconciliation” section in this MD&A for the definitions of “GAAP” and “non-GAAP” as well as a reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. Assets Under Management The Company derives revenue primarily from DHCM’s investment advisory and administration fees.
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Investment advisory and administration fees paid to DHCM are generally based on the value of the investment portfolios it manages and fluctuate with changes in the total value of its AUM. The Company, through DHCM, recognizes revenue when DHCM satisfies its performance obligations under the terms of a contract with a client.
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Model Delivery Programs - Assets Under Advisement DHCM provides strategy-specific model portfolios to sponsors of model delivery programs. DHCM is paid for its services by the program sponsor at a pre-determined rate based on AUA in the model delivery programs.
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DHCM does not have discretionary investment authority over individual client accounts in model delivery programs, and therefore, the AUA is not included in the Company’s AUM. The Company’s revenues are highly dependent on both the value and composition of AUM and AUA.
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The following is a summary of the Company’s AUM by product and investment objective, a roll-forward of the change in AUM, and a summary of AUA for 2025, 2024, and 2023: Assets Under Management and Assets Under Advisement As of December 31, (in millions) 2025 2024 2023 Proprietary Funds $ 18,785 $ 18,097 $ 15,879 Separately managed accounts 5,110 6,108 6,617 Other pooled vehicles 3,746 3,860 3,563 Collective investment trusts 1,741 1,947 1,359 Total AUM 29,382 30,012 27,418 Total AUA 1,580 1,913 1,746 Total AUM and AUA $ 30,962 $ 31,925 $ 29,164 28 Table of Contents Assets Under Management by Investment Strategy As of December 31, (in millions) 2025 2024 2023 U.S.
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Equity Large Cap $ 14,398 $ 17,702 $ 17,307 Small-Mid Cap 1,374 2,009 2,588 Mid Cap 882 1,082 1,023 Select 778 755 593 Small Cap 264 253 255 Large Cap Concentrated 190 129 98 Micro Cap 46 33 21 Total U.S.
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Equity 17,932 21,963 21,885 Alternatives Long-Short 2,344 1,684 1,725 Total Alternatives 2,344 1,684 1,725 International Equity International 161 141 109 Total International Equity 161 141 109 Fixed Income Short Duration Securitized Bond 5,064 3,732 1,948 Core Fixed Income 3,691 2,416 1,735 Securitized Credit 133 52 — Securitized Total Return 31 — — Long Duration Treasury 26 24 26 Total Fixed Income 8,945 6,224 3,709 Total All Strategies 29,382 30,012 27,428 (Less: Investments in affiliated funds) (a) — — (10 ) Total AUM 29,382 30,012 27,418 Total AUA (b) 1,580 1,913 1,746 Total AUM and AUA $ 30,962 $ 31,925 $ 29,164 (a) Certain of the Proprietary Funds own shares of the Diamond Hill Short Duration Securitized Bond Fund.
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The Company reduces the total AUM of each Proprietary Fund that holds such shares by the AUM of the investments held in this affiliated fund.
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(b) AUA is primarily comprised of model portfolio assets related to the Large Cap and Select strategies. 29 Table of Contents Change in Assets Under Management For the Year Ended December 31, (in millions) 2025 2024 2023 AUM at beginning of the year $ 30,012 $ 27,418 $ 24,763 Net cash inflows (outflows) Proprietary Funds (613 ) 726 (599 ) Separately managed accounts (1,341 ) (1,269 ) (416 ) Collective investment trusts (306 ) 403 153 Other pooled vehicles (481 ) (149 ) 368 (2,741 ) (289 ) (494 ) Net market appreciation and income 2,111 2,883 3,149 Increase (decrease) during the year (630 ) 2,594 2,655 AUM at end of the year 29,382 30,012 27,418 AUA at end of the year 1,580 1,913 1,746 Total AUM and AUA at end of year $ 30,962 $ 31,925 $ 29,164 Average AUM during the year $ 30,039 $ 29,718 $ 25,552 Average AUA during the year 1,797 1,892 1,769 Total Average AUM and AUA during the year $ 31,836 $ 31,610 $ 27,321 Net Cash Inflows (Outflows) Further Breakdown For the Year Ended December 31, (in millions) 2025 2024 2023 Net cash inflows (outflows) Equity $ (5,031 ) $ (2,544 ) $ (1,865 ) Fixed Income 2,290 2,255 1,371 $ (2,741 ) $ (289 ) $ (494 ) 2025 Discussion of Net Cash Outflows Flows out of the Company’s equity strategies were largely driven by flows out of its Large Cap, Small-Mid Cap, and Mid Cap strategies, which experienced net outflows of $4.1 billion, $0.7 billion, and $0.4 billion, respectively, partially offset by $0.3 of inflows from the Long-Short strategy.
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Outflows from the equity strategies were partially offset by fixed income net inflows of $2.3 billion, largely driven by flows into the Core Bond and Short Duration strategies, which both experienced net inflows of $1.1 billion.
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Trend in Net Cash Outflows and Potential Impact on Results of Operations Net cash outflows during 2025 continued to be concentrated in the Company’s equity strategies, particularly within its Large Cap strategy.
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As discussed above, Large Cap experienced net outflows of $4.1 billion during 2025, primarily reflecting client rebalancing activity, asset allocation shifts away from actively managed U.S. equities, and mandate-specific redemptions from certain institutional and intermediary clients.
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Net outflows were also influenced by relative investment performance, which trailed both core and value benchmarks and peer strategies during 2025, which contributed to elevated redemption activity. This marks the fourth consecutive year of outflows in the Large Cap strategy.
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Large Cap has historically represented a significant portion of the Company’s total AUM and investment advisory fee revenue (49% of AUM and 52% of advisory fee revenues as of December 31, 2025).
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As a result, sustained net outflows in this strategy could negatively impact operating results if not offset by market appreciation, asset growth in other strategies, changes in product mix, or expense management initiatives.
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Management continues to focus on diversification of the Company’s asset base and alignment of resources with areas of client demand; however, there can be no assurance that such efforts will be sufficient to offset continued net outflows in Large Cap. 2024 Discussion of Net Cash Outflows 30 Table of Contents Flows out of the Company’s equity strategies in 2024 were largely driven by flows out of its Large Cap and Small-Mid Cap strategies, which experienced net outflows of $1.6 billion and $0.8 billion, respectively.
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Outflows from the equity strategies were partially offset by fixed income net inflows of $2.3 billion, largely driven by flows into the Short Duration and Core Bond strategies, which experienced net inflows of $1.6 billion and $0.6 billion, respectively. 2023 Discussion of Net Cash Outflows Flows out of the Company’s equity strategies in 2023 were largely driven by flows out of its Large Cap strategy, which experienced net outflows of $1.4 billion.
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Net outflows from the Company’s other equity strategies totaled approximately $0.5 billion. Outflows from the equity strategies in 2023 were partially offset by fixed income net inflows of $1.4 billion into the Company’s fixed income strategies.
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For additional information regarding the risks associated with net cash outflows, client concentration, and changes in assets under management, see “Risk Factors — A significant portion of DHCM’s revenues is concentrated in a limited number of Proprietary Funds and strategies, particularly the Diamond Hill Large Cap strategy, and declines in assets under management, investment performance, or client flows could materially and adversely affect our results.” Consolidated Results of Operations The following is a table and discussion of the Company’s consolidated results of operations.
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(in thousands, except per share amounts and percentages) 2025 2024 % Change 2024 2023 % Change Total revenue $ 147,098 $ 151,095 (3 )% $ 151,095 $ 136,716 11 % Net operating income 36,736 43,892 (16 )% 43,892 35,504 24 % Adjusted net operating income (a) 43,046 48,696 (12 )% 48,696 41,434 18 % Investment income, net 30,545 15,119 102 % 15,119 23,071 (34 )% Income tax expense 17,921 15,833 13 % 15,833 15,490 2 % Net income attributable to common shareholders 48,762 43,178 13 % 43,178 42,226 2 % Earnings per share attributable to common shareholders (diluted) $ 17.91 $ 15.66 14 % $ 15.66 $ 14.32 9 % Adjusted earnings per share attributable to common shareholders (diluted) (a) $ 11.56 $ 12.92 (11 )% $ 12.92 $ 10.28 26 % Net operating profit margin 25 % 29 % NM 29 % 26 % NM Adjusted net operating profit margin (a) 29 % 32 % NM 32 % 30 % NM (a) Adjusted net operating income, adjusted earnings per share attributable to common shareholders (diluted), and adjusted net operating profit margin are non-GAAP financial measures.
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See the “Non-GAAP Financial Measures and Reconciliation” section within this Form 10-K for the definition of “non-GAAP” and a reconciliation of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.
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Summary Discussion of Consolidated Results of Operations - 2025 Compared to 2024 Revenue for 2025 decreased $4.0 million compared to 2024, primarily due to a decrease in the average advisory fee rate from 0.45% in 2024 to 0.44% in 2025, reflecting changes in asset mix, including growth in lower-fee fixed income strategies relative to higher-fee equity strategies, partially offset by a 1% increase in total average AUM and AUA.
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Refer to the “Revenue” section below in this MD&A for further details on the decrease in the average advisory fee rate. Operating profit margin was 25% for 2025 and 29% for 2024.
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The decrease in operating profit margin was primarily driven by an increase in selling, general and administrative expenses (3% of the 4% margin decrease) and deferred compensation expense (1% of the 4% margin decrease).
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Included in selling, general and administrative expenses were $2.9 million of transaction-related expenses associated with the Company's pending merger with First Eagle, which reduced operating profit margin by approximately 2%. 31 Table of Contents Adjusted net operating profit margin was 29% for 2025 and 32% for 2024.
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Adjusted net operating profit margin excludes the impact of market movements on the deferred compensation liability and related economic hedges, and the impact of the Proprietary Funds consolidated during the period. Refer to Note 2 to the consolidated financial statements for a detailed description of the funds that are consolidated during the period.
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Refer to the “Non-GAAP Financial Measures and Reconciliation” section below in this MD&A for further details on adjusted net operating profit margin.
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The Company expects that its operating margin will fluctuate from period to period based on various factors, including revenues, investment results in the strategies the Company manages, employee performance, staffing levels, and gains and losses on investments held in the Diamond Hill Fixed Term Deferred Compensation Plan and the Diamond Hill Variable Term Deferred Compensation Plan (together, the “Deferred Compensation Plans”).
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The Company had $30.5 million in investment income in 2025, compared to $15.1 million in investment income in 2024. The increase in investment income reflects favorable market conditions during 2025, including higher equity market returns and improved performance across portions of the fixed income markets, which positively impacted the value of the Company’s investment portfolio.
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Income tax expense increased $2.1 million in 2025, compared to 2024. The increase in income tax expense was primarily due to an increase in the Company’s income before taxes. The Company generated net income attributable to common shareholders of $48.8 million ($17.91 per diluted share) for 2025, compared to $43.2 million ($15.66 per diluted share) for 2024.
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The year-over-year increase in net income attributable to common shareholders was primarily due to an increase in investment income in 2025 compared to 2024, partially offset by a decrease in operating income.
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Summary Discussion of Consolidated Results of Operations - 2024 Compared to 2023 Revenue for 2024 increased $14.4 million compared to 2023, primarily due to a 16% increase in total average AUM and AUA, partially offset by a decrease in the average advisory fee rate from 0.47% in 2023 to 0.45% in 2024.
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Refer to the “Revenue” section below in this MD&A for further details on the decrease in the average advisory fee rate. Operating profit margin was 29% for 2024 and 26% for 2023.
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The increase in operating profit margin was primarily driven by compensation, and related costs, excluding deferred compensation expense (2% of the 3% margin increase) and deferred compensation expense (1% of the 3% margin increase). Adjusted net operating profit margin was 32% for 2024 and 30% for 2023.
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Adjusted net operating profit margin excludes the impact of market movements on the deferred compensation liability and related economic hedges, and the impact of the Proprietary Funds consolidated during the period. The Company had $15.1 million in investment income due to market appreciation in 2024, compared to $23.1 million in investment income due to market appreciation in 2023.
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Income tax expense increased $0.3 million in 2024, compared to 2023. The increase in income tax expense was due to an increase in the Company’s income before taxes, and an increase in its effective tax rate from 26.4% to 26.8% year over year.
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The increase in the Company’s effective tax rate in 2024 was due to the impact attributable to redeemable noncontrolling interests. The Company generated net income attributable to common shareholders of $43.2 million ($15.66 per diluted share) for 2024, compared to $42.2 million ($14.32 per diluted share) for 2023.
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The year-over-year increase in net income attributable to common shareholders was primarily due to an increase in revenues and was partially offset by lower investment income in 2024 compared to higher investment income in 2023.
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Revenue (in thousands, except percentages) 2025 2024 % Change 2024 2023 % Change Investment advisory $ 139,869 $ 143,342 (2 )% $ 143,342 $ 129,180 11 % Fund administration, net 7,229 7,753 (7 )% 7,753 7,536 3 % Total $ 147,098 $ 151,095 (3 )% $ 151,095 $ 136,716 11 % 32 Table of Contents Revenue - 2025 Compared to 2024 Investment Advisory Fees.
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Investment advisory fees decreased by $3.5 million or 2%, from 2024 to 2025. Investment advisory fees are calculated as a percentage of the market value of client accounts at contractual fee rates, which vary by investment product.
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The decrease in investment advisory fees was primarily due to a decrease in the average advisory fee rate from 0.45% to 0.44% period over period, partially offset by a slight increase in total average AUM and AUA of 1%. The average advisory fee rate for equity assets remained flat at 0.48% in 2024 and 2025.
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The average advisory fee rate for fixed income assets increased from 0.30% in 2024 to 0.33% in 2025. The decrease in the total average advisory fee rate was due to the growth in fixed income assets, which increased from 15% of total average AUM and AUA in 2024, to 24% in 2025.
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The average advisory fee rate is calculated by dividing investment advisory revenues by total average AUM and AUA during the period. If the trend in the growth in fixed income assets as a percentage of total assets continues, the total average advisory fee rate could continue to decline. Fund Administration Fees.
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Fund administration fees decreased $0.5 million, or 7%, from 2024 compared to 2025. Fund administration fees include administration fees received from the Proprietary Funds, which are calculated as a percentage of the funds’ average AUM.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Table of Contents The Company’s revenues and net income are based primarily on the value of its AUM. Accordingly, declines in financial market values directly and negatively impact its investment advisory revenues and net income. The Company invests in its investment strategies, which are market risk sensitive financial instruments.
Biggest changeITEM 7A. Quantitative and Qualitative Disclosures About Market Risk The Company’s revenues and net income are based primarily on the value of its AUM. Accordingly, declines in financial market values directly and negatively impact its investment advisory revenues and net income. The Company invests in its investment strategies, which are market risk sensitive financial instruments.
The table below summarizes the Company’s market risks as of December 31, 2024, and shows the effects of a hypothetical 10% increase and decrease in investments.
The table below summarizes the Company’s market risks as of December 31, 2025, and shows the effects of a hypothetical 10% increase and decrease in investments.
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Fair Value as of December 31, 2024 Fair Value Assuming a Hypothetical 10% Increase Fair Value Assuming a Hypothetical 10% Decrease Equity investments $ 79,207,519 $ 87,128,271 $ 71,286,767 Fixed Income investments 80,545,462 88,600,008 72,490,916 Total $ 159,752,981 $ 175,728,279 $ 143,777,683 37
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Fair Value Fair Value Assuming a Assuming a Fair Value as of Hypothetical Hypothetical December 31, 2025 10% Increase 10% Decrease Equity investments $ 98,515,280 $ 108,366,808 $ 88,663,752 Fixed Income investments 78,882,941 86,771,235 70,994,647 Total $ 177,398,221 $ 195,138,043 $ 159,658,399 42 Table of Contents

Other DHIL 10-K year-over-year comparisons