Diamond Hill Investment Group Reports 11% Revenue Growth to $151.1 Million for Fiscal Year 2024

Diamond Hill Investment Group, Inc. (DHIL) reported a total revenue of $151.1 million for the fiscal year ending December 31, 2024, marking an 11% increase from $136.7 million in 2023. The company's net income attributable to common shareholders rose to $43.2 million, or $15.66 per diluted share, compared to $42.2 million, or $14.32 per diluted share, in the previous year. This growth in revenue was primarily driven by a 16% increase in average assets under management (AUM) and assets under advisement (AUA), despite a slight decline in the average advisory fee rate from 0.47% to 0.45%.

In terms of AUM, DHIL reported a total of $30.0 billion as of December 31, 2024, up from $27.4 billion in 2023. The increase was attributed to net cash inflows of $726 million into proprietary funds, alongside a significant market appreciation of $2.9 billion. However, separately managed accounts experienced net outflows of $1.3 billion, which partially offset the overall growth. The company’s total AUA also increased to $1.9 billion from $1.7 billion in the prior year.

Strategically, DHIL has focused on enhancing its investment strategies and client alignment philosophy, which emphasizes long-term investment outcomes. The company has maintained a consistent employee headcount of 127 as of December 31, 2024, with an average employee tenure of 8.3 years. The firm continues to prioritize its capacity discipline, which may limit growth in AUM to ensure that investment results remain attractive for clients. The company’s growth strategy includes a commitment to delivering a superior client experience and developing investment strategies that align with client objectives.

Operationally, DHIL has seen a shift in its investment vehicle preferences, with increased adoption of separately managed accounts and model delivery programs. The company’s distribution efforts are primarily focused on sophisticated asset allocators, which has allowed it to maintain a diversified client base. The firm’s competitive positioning remains challenged by industry trends favoring lower-fee strategies and passive investment products, which could impact future revenue growth.

Looking ahead, DHIL anticipates continued fluctuations in its operating margin based on various factors, including investment performance and market conditions. The company remains committed to its long-term investment principles and aims to adapt to evolving market dynamics while maintaining its focus on client alignment and investment excellence.