Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-24498 | |
Entity Registrant Name | DIAMOND HILL INVESTMENT GROUP INC | |
Entity Incorporation, State or Country Code | OH | |
Entity Tax Identification Number | 65-0190407 | |
Entity Address, Address Line One | 325 John H. McConnell Blvd, Suite 200 | |
Entity Address, City or Town | Columbus | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43215 | |
City Area Code | 614 | |
Local Phone Number | 255-3333 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | DHIL | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 3,384,158 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000909108 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 118,113,741 | $ 84,430,059 |
Investments | 133,978,699 | 203,488,217 |
Accounts receivable | 16,269,731 | 20,290,283 |
Prepaid expenses | 2,941,894 | 2,372,712 |
Property and equipment, net of depreciation | 6,018,420 | 3,680,472 |
Deferred taxes | 12,388,377 | 11,466,100 |
Total assets | 289,710,862 | 325,727,843 |
Liabilities | ||
Accounts payable and accrued expenses | 7,651,105 | 15,561,491 |
Accrued incentive compensation | 18,342,000 | 26,754,167 |
Income taxes payable | 1,416,612 | 2,768,681 |
Deferred compensation | 28,416,798 | 22,387,874 |
Total liabilities | 55,826,515 | 67,472,213 |
Redeemable noncontrolling interest | 10,662,345 | 62,679,687 |
Permanent Shareholders’ equity | ||
Common stock, no par value: 7,000,000 shares authorized; 3,403,739 issued and outstanding at September 30, 2019 (inclusive of 235,144 unvested shares); 3,499,285 issued and outstanding at December 31, 2018 (inclusive of 211,575 unvested shares) | 111,265,293 | 124,933,060 |
Preferred stock, undesignated, 1,000,000 shares authorized and unissued | 0 | 0 |
Deferred equity compensation | (22,239,482) | (22,008,054) |
Retained earnings | 134,196,191 | 92,650,937 |
Total permanent shareholders’ equity | 223,222,002 | 195,575,943 |
Total liabilities and shareholders’ equity | $ 289,710,862 | $ 325,727,843 |
Book value per share (usd per share) | $ 65.58 | $ 55.89 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 7,000,000 | 7,000,000 |
Common stock, shares issued | 3,403,739 | 3,499,285 |
Common stock, shares outstanding | 3,403,739 | 3,470,428 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred Stock, shares Outstanding | ||
Unvested shares | 235,144 | 211,575 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUES: | ||||
Revenue | $ 34,592,372 | $ 37,471,647 | $ 100,716,763 | $ 111,181,363 |
OPERATING EXPENSES: | ||||
Compensation and related costs | 16,071,176 | 15,441,623 | 47,665,109 | 44,401,217 |
General and administrative | 3,543,236 | 2,962,220 | 10,331,295 | 8,748,419 |
Sales and marketing | 1,443,328 | 1,281,856 | 4,261,311 | 3,793,382 |
Mutual fund administration | 778,093 | 870,103 | 2,488,809 | 2,769,009 |
Total operating expenses | 21,835,833 | 20,555,802 | 64,746,524 | 59,712,027 |
NET OPERATING INCOME | 12,756,539 | 16,915,845 | 35,970,239 | 51,469,336 |
Investment income, net | 2,822,947 | 5,210,332 | 23,627,419 | 7,216,278 |
INCOME BEFORE TAXES | 15,579,486 | 22,126,177 | 59,597,658 | 58,685,614 |
Income tax expense | 4,062,849 | 5,726,807 | 14,367,605 | 14,446,092 |
NET INCOME | 11,516,637 | 16,399,370 | 45,230,053 | 44,239,522 |
Net income attributable to redeemable noncontrolling interest | 99,177 | 1,191,317 | 3,684,799 | 1,671,640 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 11,417,460 | $ 15,208,053 | $ 41,545,254 | $ 42,567,882 |
Earnings per share attributable to common shareholders | ||||
Basic (USD per share) | $ 3.35 | $ 4.31 | $ 12 | $ 12.12 |
Diluted (USD per share) | $ 3.35 | $ 4.31 | $ 12 | $ 12.11 |
Weighted average shares outstanding | ||||
Basic (in shares) | 3,411,632 | 3,530,586 | 3,460,959 | 3,512,547 |
Diluted (in shares) | 3,411,632 | 3,532,346 | 3,461,159 | 3,514,517 |
Investment advisory | ||||
REVENUES: | ||||
Revenue | $ 32,498,101 | $ 34,928,205 | $ 94,521,491 | $ 103,085,767 |
Mutual fund administration revenue, net | ||||
REVENUES: | ||||
Revenue | $ 2,094,271 | $ 2,543,442 | $ 6,195,272 | $ 8,095,596 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity and Redeemable Noncontrolling Interest (unaudited) - USD ($) | Total | Common Stock | Deferred Equity Compensation | Retained Earnings |
Beginning balance (shares) at Dec. 31, 2017 | 3,470,428 | |||
Beginning Balance at Dec. 31, 2017 | $ 172,443,820 | $ 118,209,111 | $ (19,134,963) | $ 73,369,672 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of restricted stock grants (shares) | 63,950 | |||
Issuance of restricted stock grants | $ 12,298,334 | (12,298,334) | ||
Amortization of restricted stock grants | 4,814,465 | 4,814,465 | ||
Issuance of stock grants (in shares) | 20,153 | |||
Issuance of stock grants | 4,109,197 | $ 4,109,197 | ||
Issuance of common stock related to 401k plan match (in shares) | 8,481 | |||
Issuance of common stock related to 401k plan match | 1,658,358 | $ 1,658,358 | ||
Shares withheld related to employee tax withholding (in shares) | (7,964) | |||
Shares withheld related to employee tax withholding | (1,602,528) | $ (1,602,528) | ||
Forfeiture of restricted stock grants (shares) | (20,900) | |||
Forfeiture of restricted stock grants | $ (4,116,626) | 4,116,626 | ||
Net income | 42,567,882 | 42,567,882 | ||
Ending balance (shares) at Sep. 30, 2018 | 3,534,148 | |||
Ending Balance at Sep. 30, 2018 | 223,991,194 | $ 130,555,846 | (22,502,206) | 115,937,554 |
Beginning balance attributable to redeemable noncontrolling Interests at Dec. 31, 2017 | 20,076,806 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net Income Attributable to Redeemable Noncontrolling Interest | 1,671,640 | |||
Net subscriptions of consolidated funds | 22,521,607 | |||
Net consolidations (deconsolidations) of Company sponsored investments | 16,444,640 | |||
Ending balance attributable to redeemable noncontrolling Interests at Sep. 30, 2018 | 60,714,693 | |||
Beginning balance (shares) at Jun. 30, 2018 | 3,532,634 | |||
Beginning Balance at Jun. 30, 2018 | 207,079,043 | $ 130,369,411 | (24,019,869) | 100,729,501 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of restricted stock grants (shares) | 2,300 | |||
Issuance of restricted stock grants | $ 380,397 | (380,397) | ||
Amortization of restricted stock grants | 1,798,230 | 1,798,230 | ||
Issuance of common stock related to 401k plan match (in shares) | 3,239 | |||
Issuance of common stock related to 401k plan match | 591,232 | $ 591,232 | ||
Shares withheld related to employee tax withholding (in shares) | (3,525) | |||
Shares withheld related to employee tax withholding | (685,364) | $ (685,364) | ||
Forfeiture of restricted stock grants (shares) | (500) | |||
Forfeiture of restricted stock grants | $ (99,830) | 99,830 | ||
Net income | 15,208,053 | 15,208,053 | ||
Ending balance (shares) at Sep. 30, 2018 | 3,534,148 | |||
Ending Balance at Sep. 30, 2018 | 223,991,194 | $ 130,555,846 | (22,502,206) | 115,937,554 |
Beginning balance attributable to redeemable noncontrolling Interests at Jun. 30, 2018 | 50,777,801 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net Income Attributable to Redeemable Noncontrolling Interest | 1,191,317 | |||
Net subscriptions of consolidated funds | 8,745,575 | |||
Ending balance attributable to redeemable noncontrolling Interests at Sep. 30, 2018 | $ 60,714,693 | |||
Beginning balance (shares) at Dec. 31, 2018 | 3,470,428 | 3,499,285 | ||
Beginning Balance at Dec. 31, 2018 | $ 195,575,943 | $ 124,933,060 | (22,008,054) | 92,650,937 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of restricted stock grants (shares) | 52,269 | |||
Issuance of restricted stock grants | $ 7,233,016 | (7,233,016) | ||
Amortization of restricted stock grants | 4,874,121 | 4,874,121 | ||
Issuance of stock grants (in shares) | 24,048 | |||
Issuance of stock grants | 3,655,296 | $ 3,655,296 | ||
Issuance of common stock related to 401k plan match (in shares) | 13,027 | |||
Issuance of common stock related to 401k plan match | 1,850,080 | $ 1,850,080 | ||
Shares withheld related to employee tax withholding (in shares) | (7,388) | |||
Shares withheld related to employee tax withholding | (1,039,631) | $ (1,039,631) | ||
Forfeiture of restricted stock grants (shares) | (11,700) | |||
Forfeiture of restricted stock grants | $ (2,127,467) | 2,127,467 | ||
Repurchase of common stock (shares) | (165,802) | |||
Repurchase of common stock | (23,239,061) | $ (23,239,061) | ||
Net income | $ 41,545,254 | 41,545,254 | ||
Ending balance (shares) at Sep. 30, 2019 | 3,403,739 | 3,403,739 | ||
Ending Balance at Sep. 30, 2019 | $ 223,222,002 | $ 111,265,293 | (22,239,482) | 134,196,191 |
Beginning balance attributable to redeemable noncontrolling Interests at Dec. 31, 2018 | 62,679,687 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net Income Attributable to Redeemable Noncontrolling Interest | 3,684,799 | |||
Net subscriptions of consolidated funds | 5,689,957 | |||
Net consolidations (deconsolidations) of Company sponsored investments | (61,392,098) | |||
Ending balance attributable to redeemable noncontrolling Interests at Sep. 30, 2019 | 10,662,345 | |||
Beginning balance (shares) at Jun. 30, 2019 | 3,443,464 | |||
Beginning Balance at Jun. 30, 2019 | 217,694,738 | $ 116,835,709 | (21,919,702) | 122,778,731 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of restricted stock grants (shares) | 23,219 | |||
Issuance of restricted stock grants | $ 3,207,195 | (3,207,195) | ||
Amortization of restricted stock grants | 1,498,405 | 1,498,405 | ||
Issuance of common stock related to 401k plan match (in shares) | 4,551 | |||
Issuance of common stock related to 401k plan match | 628,465 | $ 628,465 | ||
Shares withheld related to employee tax withholding (in shares) | (3,088) | |||
Shares withheld related to employee tax withholding | (437,631) | $ (437,631) | ||
Forfeiture of restricted stock grants (shares) | (7,200) | |||
Forfeiture of restricted stock grants | $ (1,389,010) | 1,389,010 | ||
Repurchase of common stock (shares) | (57,207) | |||
Repurchase of common stock | (7,579,435) | $ (7,579,435) | ||
Net income | $ 11,417,460 | 11,417,460 | ||
Ending balance (shares) at Sep. 30, 2019 | 3,403,739 | 3,403,739 | ||
Ending Balance at Sep. 30, 2019 | $ 223,222,002 | $ 111,265,293 | $ (22,239,482) | $ 134,196,191 |
Beginning balance attributable to redeemable noncontrolling Interests at Jun. 30, 2019 | 34,076,350 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Net Income Attributable to Redeemable Noncontrolling Interest | 99,177 | |||
Net subscriptions of consolidated funds | 538,128 | |||
Net consolidations (deconsolidations) of Company sponsored investments | (24,051,310) | |||
Ending balance attributable to redeemable noncontrolling Interests at Sep. 30, 2019 | $ 10,662,345 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 45,230,053 | $ 44,239,522 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 892,463 | 868,243 |
Share-based compensation | 6,724,201 | 6,472,823 |
Increase in accounts receivable | (4,067,885) | (90,525) |
(Decrease) increase in current income taxes payable | (1,352,069) | 4,755,773 |
Change in deferred income taxes | (922,277) | (1,709,775) |
Net gains on investments | (17,465,565) | (3,184,197) |
Net change in securities held by Consolidated Funds | 10,149,201 | (47,246,344) |
(Decrease) increase in accrued incentive compensation | (4,756,871) | 321,697 |
Increase in deferred compensation | 6,028,924 | 4,951,871 |
Other changes in assets and liabilities | (388,751) | 252,238 |
Net cash provided by operating activities | 40,071,424 | 9,631,326 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (609,836) | (699,917) |
Purchases of Company sponsored investments | (10,955,556) | (4,362,077) |
Proceeds from sale of Company sponsored investments | 43,245,298 | 1,789,359 |
Net cash on deconsolidation of company sponsored investments | (22,723,853) | 0 |
Net cash provided by (used in) investing activities | 8,956,053 | (3,272,635) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Value of shares withheld related to employee tax withholding | (1,039,631) | (1,602,528) |
Net subscriptions received from redeemable noncontrolling interest holders | 8,934,897 | 19,261,162 |
Repurchase of common stock | (23,239,061) | 0 |
Net cash (used in) provided by financing activities | (15,343,795) | 17,658,634 |
CASH AND CASH EQUIVALENTS | ||
Net change during the period | 33,683,682 | 24,017,325 |
At beginning of period | 84,430,059 | 76,602,108 |
At end of period | 118,113,741 | 100,619,433 |
Supplemental cash flow information: | ||
Income taxes paid | 16,641,951 | 11,400,094 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued as incentive compensation | 3,655,296 | 4,109,197 |
Charitable donation of corporate investments | 0 | 1,989,803 |
Net (redemptions) subscriptions of ETF shares for marketable securities | $ (3,244,940) | $ 3,260,445 |
Business and Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Diamond Hill Investment Group, Inc. (the "Company"), an Ohio corporation, derives its consolidated revenues and net income from investment advisory and fund administration services. Diamond Hill Capital Management, Inc. ("DHCM"), an Ohio corporation, is a wholly owned subsidiary of the Company and a registered investment adviser. DHCM is the investment adviser to the Diamond Hill Funds (the "Funds"), a series of open-end mutual funds, a private investment fund, and other separately managed accounts. DHCM is also administrator for the Funds. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of September 30, 2019 and December 31, 2018 , and for the three- and nine- month periods ended September 30, 2019 and 2018 , for Diamond Hill Investment Group, Inc. and its subsidiaries (referred to in these notes to the condensed consolidated financial statements as "the Company," "management," "we," "us," and "our") have been prepared in accordance with United States generally accepted accounting principles ("GAAP") and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (the "SEC") Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair statement of the financial condition and results of operations at the dates and for the interim periods presented have been included. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for any full fiscal year. These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements of the Company included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the " 2018 Annual Report") as filed with the SEC. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions related to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Reclassification Certain prior period amounts and disclosures may have been reclassified to conform to the current period's financial presentation. Principles of Consolidation The accompanying consolidated financial statements include the operations of the Company and its controlled subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The Company holds certain investments in the Funds, and previously held an investment in an exchange traded fund (the "ETF") advised by the Company, for general corporate investment purposes, to provide seed capital for newly formed strategies or to add capital to existing strategies. The Funds are organized in a series fund structure in which there are multiple mutual funds within one Trust. The Trust is an open-end investment company registered under the Investment Company Act of 1940, as amended (the"1940 Act"). The ETF was an individual series of ETF Series Solutions which was also an open-end investment company registered under the 1940 Act. The ETF liquidated and its assets were distributed to its shareholders on April 5, 2019. Each of the individual mutual funds represents (and the ETF represented) a separate share class of a legal entity organized under the Trust. The Company performs its analysis at the individual mutual fund and ETF level and has concluded the mutual funds are, and the ETF was, voting rights entities ("VREs") because the structure of the investment product is such that the shareholders are deemed to have the power through voting rights to direct the activities that most significantly impact the entity's economic performance. To the extent material, these investment products are consolidated if Company ownership, directly or indirectly, represents a majority interest (greater than 50%). The Company records redeemable noncontrolling interests in consolidated investments for which the Company's ownership is less than 100%. The Company has consolidated the Diamond Hill International Fund and the Diamond Hill Global Fund (collectively the "Consolidated Funds") as of September 30, 2019 . The Company deconsolidated the ETF, the Diamond Hill Core Bond Fund and the Diamond Hill High Yield Fund during the nine months ended September 30, 2019 , as the Company's ownership declined to less than 50%. DHCM is the managing member of Diamond Hill General Partner, LLC (the “General Partner”), which is the general partner of Diamond Hill Investment Partners, L.P. (“DHIP”) whose underlying assets consist primarily of marketable securities. DHCM is wholly owned by the Company and is consolidated by us. Further, DHCM, through its control of the General Partner, has the power to direct DHIP's economic activities and the right to receive investment advisory fees that may be significant to DHIP. The Company concluded it did not have a variable interest in DHIP as the fees paid to the General Partner are considered to contain customary terms and conditions as found in the market for similar products and the Company has no equity ownership in DHIP. Redeemable Noncontrolling Interest Redeemable noncontrolling interest represents third-party interests in the Consolidated Funds. This interest is redeemable at the option of the investors and therefore is not treated as permanent equity. Redeemable noncontrolling interest is recorded at redemption value, which approximates the fair value each reporting period. Segment Information Management has determined that the Company operates in one business segment, providing investment management and administration services to mutual funds, separately managed accounts, and a private investment fund. Therefore, no disclosures relating to operating segments are presented in the Company's annual or interim financial statements. Cash and Cash Equivalents Cash and cash equivalents include demand deposits and money market mutual funds held by DHCM. Accounts Receivable Accounts receivable are recorded when they are due and are presented on the balance sheet net of any allowance for doubtful accounts. Accounts receivable are written off when they are determined to be uncollectible. Any allowance for doubtful accounts is estimated based on the Company’s historical losses, existing conditions in the industry, and the financial stability of the individual or entity that owes the receivable. No allowance for doubtful accounts was deemed necessary at September 30, 2019 or December 31, 2018 . Accounts receivable from the Funds were $9.9 million as of September 30, 2019 and $9.4 million as of December 31, 2018 . Investments Management determines the appropriate classification of its investments at the time of purchase and re-evaluates its determination at each reporting period. Investments in the Funds we advise where the Company has neither control nor the ability to exercise significant influence, as well as securities held in the Consolidated Funds, are measured at fair value based on quoted market prices. Unrealized gains and losses are recorded as investment income (loss) in the Company's consolidated statements of income. Investments classified as equity method investments represent investments in which the Company owns between 20-50% of the outstanding voting interests in the entity or when it is determined that the Company is able to exercise significant influence but not control over the investments. When using the equity method, the Company recognizes its respective share of the investee's net income or loss for the period, which is recorded as investment income in the Company's consolidated statements of income. Property and Equipment Property and equipment, consisting of leasehold improvements, right-of use lease assets, computer equipment, furniture, and fixtures, are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated lives of the assets. Revenue Recognition – General Revenue is recognized when performance obligations under the terms of a contract with a client are satisfied. The Company earns substantially all of its revenue from investment advisory and fund administration contracts. Investment advisory and administration fees, generally calculated as a percentage of assets under management ("AUM"), are recorded as revenue as services are performed. In addition to fixed fees based on a percentage of AUM, certain client accounts also provide periodic variable rate fees. Revenue earned during the three months ended September 30, 2019 and 2018 under contracts with clients include: Three Months Ended September 30, 2019 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 24,178,440 $ 2,094,271 $ 26,272,711 Sub-advised funds and separately managed accounts 8,319,661 — 8,319,661 $ 32,498,101 $ 2,094,271 $ 34,592,372 Three Months Ended September 30, 2018 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 26,864,835 $ 2,543,442 $ 29,408,277 Sub-advised funds and separately managed accounts 8,063,370 — 8,063,370 $ 34,928,205 $ 2,543,442 $ 37,471,647 Revenue earned during the nine months ended September 30, 2019 and 2018 under contracts with clients include: Nine Months Ended September 30, 2019 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 72,093,686 $ 6,195,272 $ 78,288,958 Sub-advised funds and separately managed accounts 22,427,805 — 22,427,805 $ 94,521,491 $ 6,195,272 $ 100,716,763 Nine Months Ended September 30, 2018 Investment advisory Mutual fund Total revenue Proprietary funds $ 80,464,941 $ 8,095,596 $ 88,560,537 Sub-advised funds and separately managed accounts 22,620,826 — 22,620,826 $ 103,085,767 $ 8,095,596 $ 111,181,363 Revenue Recognition – Investment Advisory Fees The Company's investment advisory contracts have a single performance obligation (the investment advisory services provided to the client) as the promised services are not separately identifiable from other promises in the contracts and, therefore, are not distinct. All performance obligations to provide advisory services are satisfied over time and the Company recognizes revenue as time passes. The fees we receive for our services under our investment advisory contracts are based on our AUM, which changes based on the value of securities held under each advisory contract. These fees are thereby constrained and represent variable consideration, and are excluded from revenue until the AUM on which our client is billed is no longer subject to market fluctuations. Revenue Recognition – Variable Rate Fees The Company manages certain client accounts that provide for variable rate fees. These fees are calculated based on client investment results over rolling 5 -year periods. The Company records variable rate fees at the end of the contract measurement period because the variable fees earned are constrained based on movements in the financial markets. During the three and nine months ended September 30, 2019 , the Company recorded $0.9 million in variable rate fees. During the three and nine months ended September 30, 2018 , the Company recorded $0.6 million in variable rate fees. The table below shows AUM subject to variable rate fees and the amount of variable rate fees that would be recognized based upon investment results as of September 30, 2019 : As of September 30, 2019 AUM subject to variable rate fees Unearned variable rate fees Contractual Period Ending: Quarter Ending December 31, 2019 $ 62,831,955 $ 612,273 Quarter Ending March 31, 2020 13,476,137 — Quarter Ending September 30, 2020 37,469,889 179,474 Quarter Ending September 30, 2021 284,414,344 6,328,189 Total $ 398,192,325 $ 7,119,936 The contractual end dates highlight the time remaining until the variable rate fees are scheduled to be earned. The amount of variable rate fees that would be recognized based upon investment results as of September 30, 2019 , will increase or decrease based on future client investment results through the contractual period end. There can be no assurance that the unearned amounts will ultimately be earned. Revenue Recognition – Mutual Fund Administration DHCM has an administrative and transfer agency services agreement with the Funds under which DHCM performs certain services for each Fund. These services include performance obligations, such as mutual fund administration, fund accounting, transfer agency, and other related functions. These services are performed concurrently under our agreement with the Funds, all performance obligations to provide these administrative services are satisfied over time, and the Company recognizes revenue as time passes. For performing these services each Fund pays DHCM a fee, which is calculated using an annual rate times the average daily net assets of each respective share class. These fees are thereby constrained and represent variable consideration, and are excluded from revenue until the AUM on which we bill the Funds is no longer subject to market fluctuations. The Funds have selected and contractually engaged certain vendors to fulfill various services to benefit the Funds’ shareholders or to satisfy regulatory requirements of the Funds. These services include, among others, required shareholder mailings, federal and state registrations, and legal and audit services. DHCM, in fulfilling a portion of its role under the administration agreement with the Funds, acts as agent to pay these obligations of the Funds. Each vendor is independently responsible for fulfillment of the services it has been engaged to provide and negotiates its fees and terms directly with the management and board of trustees of the Funds. The fee that each Fund pays to DHCM is reviewed annually by the Funds’ board of trustees and specifically takes into account the contractual expenses that DHCM pays on behalf of the Funds. As a result, DHCM is not involved in the delivery or pricing of these services, and bears no risk related to these services. Revenue has been recorded net of these Fund related expenses. In addition, DHCM advances the upfront commissions that are paid to brokers who sell Class C shares of the Funds. These advances are capitalized and amortized over 12 months to correspond with the repayments DHCM receives from the principal underwriter to recoup this commission advancement. Mutual fund administration gross and net revenue are summarized below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Mutual fund administration: Administration revenue, gross $ 5,677,414 $ 6,169,984 $ 16,599,581 $ 18,771,040 Fund related expense (3,589,273 ) (3,638,618 ) (10,430,419 ) (10,702,498 ) Revenue, net of related expenses 2,088,141 2,531,366 6,169,162 8,068,542 DHCM C-Share financing: Broker commission advance repayments 57,908 84,248 176,901 264,107 Broker commission amortization (51,778 ) (72,172 ) (150,791 ) (237,053 ) Financing activity, net 6,130 12,076 26,110 27,054 Mutual fund administration revenue, net $ 2,094,271 $ 2,543,442 $ 6,195,272 $ 8,095,596 Income Taxes The Company accounts for current and deferred income taxes through an asset and liability approach. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company is subject to examination by federal and applicable state and local jurisdictions for various tax periods. The Company’s income tax positions are based on research and interpretations of the income tax laws and rulings in each of the jurisdictions in which it does business. Due to the subjectivity of interpretations of laws and rulings in each jurisdiction, the differences and interplay in tax laws among those jurisdictions, and the inherent uncertainty in estimating the final resolution of complex tax audit matters, the Company’s estimates of income tax liabilities may differ from actual payments or assessments. The Company regularly assesses its position with regard to tax exposures and records liabilities for these uncertain tax positions and related interest and penalties, if any, according to the principles of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes . The Company records interest and penalties within income tax expense on the income statement. Earnings Per Share Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, which includes participating securities. Diluted EPS reflects the potential dilution of EPS due to unvested restricted stock units. See Note 9 . Newly Issued But Not Yet Adopted Accounting Guidance In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, “Fair Value Measurements.” This update makes certain removals from, changes to and additions to existing disclosure requirements for fair value measurement. ASU 2018-13 does not change fair value measurements already required or permitted by existing standards. ASU 2018-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management does not believe that adoption of ASU 2018-13 will materially impact the Company’s financial statements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The following table summarizes the carrying value of these investments as of September 30, 2019 and December 31, 2018 : As of September 30, 2019 December 31, 2018 Fair value investments: Securities held in Consolidated Funds (a) $ 29,635,079 $ 153,730,480 Company sponsored investments 43,200,396 33,418,088 Company sponsored equity method investments 61,143,224 16,339,649 Total Investments $ 133,978,699 $ 203,488,217 (a) Of the securities held in the Consolidated Funds as of September 30, 2019 , $18.8 million were held directly by the Company and $10.8 million were held by noncontrolling shareholders. Of the securities held in the Consolidated Funds as of December 31, 2018 , $84.7 million were held directly by the Company and $69.0 million were held by noncontrolling shareholders. The Company deconsolidated the ETF, Diamond Hill Core Bond Fund and the Diamond Hill High Yield Fund during the nine months ended September 30, 2019 . The ETF liquidated and its assets were distributed to its shareholders on April 5, 2019. As of September 30, 2019 , our equity method investments consisted of the Diamond Hill Research Opportunities Fund and the Diamond Hill Core Bond Fund, and our ownership percentage in each of these investments was 22% and 38% , respectively. During the first half of 2019 there were periods of time where our ownership in the Diamond Hill International Equity Fund, L.P. and the Diamond Hill High Yield Fund was between 20% and 50% thus, a portion of their income is included in the table below for the nine months ended September 30, 2019. The following table includes the condensed summary financial information from the Company's equity method investments as of and for the periods ended September 30, 2019 : As of September 30, 2019 Total assets $ 236,700,619 Total liabilities 41,168,623 Net assets 195,531,996 DHCM's portion of net assets 61,143,224 For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Investment income $ 962,281 $ 4,148,489 Expenses 345,111 955,320 Net realized gains 858,741 5,243,737 Net change in unrealized appreciation 1,719,459 11,782,498 Net income 3,195,370 20,219,404 DHCM's portion of net income 1,196,750 7,014,994 |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company determines the fair value of our cash equivalents and certain investments using the following broad levels listed below: Level 1 - Unadjusted quoted prices for identical instruments in active markets. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-driven valuations in which all significant inputs are observable. Level 3 - Valuations derived from techniques in which significant inputs are unobservable. We do not value any investments using Level 3 inputs. These levels are not necessarily an indication of the risk or liquidity associated with investments. The following table summarizes investments that are recognized in our consolidated balance sheet using fair value measurements (excluding investments classified as equity method investments) determined based upon the differing levels as of September 30, 2019 : Level 1 Level 2 Level 3 Total Cash equivalents (money market mutual funds) $ 116,193,674 $ — $ — $ 116,193,674 Fair value investments Securities held in Consolidated Funds (a) 15,480,312 14,154,767 — $ 29,635,079 Company sponsored investments 43,200,396 — — $ 43,200,396 (a) Of the securities held in the Consolidated Funds as of September 30, 2019 , $18.8 million were held directly by the Company and $10.8 million were held by noncontrolling shareholders. The Company determines transfers between fair value hierarchy levels at the end of the reporting period. There were no transfers in or out of the levels during the nine months ended September 30, 2019 . Changes to fair values of the investments are recorded in the Company’s consolidated statements of income as investment income (loss), net. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit The Company has a committed Line of Credit Agreement (the "Credit Agreement") with a commercial bank that matures on December 27, 2019 and permits the Company to borrow up to $25.0 million . Borrowings under the Credit Agreement bear interest at a rate equal to LIBOR plus 1.00% . The Company pays a commitment fee on the unused portion of the facility, accruing at a rate per annum of 0.10% . The Company has no t borrowed under the Credit Agreement as of and for the period ended September 30, 2019 . The proceeds of the Credit Agreement may be used by the Company and its subsidiaries for ongoing working capital needs, to seed new and existing investment strategies, and for other general corporate purposes. The Credit Agreement contains representations, warranties and covenants that are customary for agreements of this type. |
Compensation Plans
Compensation Plans | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Compensation Plans | Compensation Plans Share-Based Payment Transactions The Company issues restricted stock awards under its 2014 Equity and Cash Incentive Plan (the "2014 Plan"). Restricted stock awards represent common shares issued and outstanding upon grant subject to vesting restrictions. The following table represents a roll-forward of outstanding restricted stock and related activity during the nine months ended September 30, 2019 : Shares Weighted-Average Grant Date Price per Share Outstanding restricted stock as of December 31, 2018 214,575 $ 177.22 Grants issued 49,269 146.81 Grants vested (17,000 ) 126.13 Grants forfeited (11,700 ) 181.83 Total outstanding restricted stock as of September 30, 2019 235,144 $ 174.44 As of September 30, 2019 , there were 230,242 common shares available for awards under the 2014 Plan. Total deferred equity compensation related to unvested restricted stock was $22.2 million as of September 30, 2019 . Compensation expense related to restricted stock is calculated based upon the fair market value of the common shares on grant date. The Company's policy is to adjust compensation expense for forfeitures as they occur. The recognition of compensation expense related to deferred compensation over the remaining vesting periods is as follows: Three Months 2019 2020 2021 2022 2023 Thereafter Total $ 1,888,550 $ 6,533,106 $ 5,252,547 $ 4,270,399 $ 2,174,456 $ 2,120,424 $ 22,239,482 Stock Grant Transactions The following table represents common shares issued as part of our incentive compensation program during the nine months ended September 30, 2019 and 2018 : Shares Issued Grant Date Value September 30, 2019 24,048 $ 3,655,296 September 30, 2018 20,153 $ 4,109,197 Deferred Compensation Plans The Company offers two deferred compensation plans, the Diamond Hill Fixed Term Deferred Compensation Plan and the Diamond Hill Variable Term Deferred Compensation Plan (collectively the “Plans”). Under the Plans, participants may elect to voluntarily defer, for a minimum of five years , certain incentive compensation, which the Company then contributes into the Plans. Each participant is responsible for designating investment options for assets they contribute, and the distribution paid to each participant reflects any gains or losses on the assets realized while in the Plans. Assets held in the Plans are included in the Company’s investment portfolio, and the associated obligation to participants is included in deferred compensation liability. Deferred compensation liability was $28.4 million and $22.4 million as of September 30, 2019 and December 31, 2018 , respectively. |
Operating Lease
Operating Lease | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating Lease | Operating Lease The Company currently leases office space of approximately 37,829 square feet at one location. In February 2016, the FASB issued ASU 2016-02, "Leases", which, among other things, requires lessees to recognize most leases on-balance sheet. The Company adopted this ASU on its effective date, January 1, 2019, using a modified retrospective approach without restating prior comparative periods. Upon implementation, the Company recorded a right-of use asset of approximately $2.9 million , which includes the lease liability amount less deferred rent liabilities and lease incentives received, and a lease liability of approximately $3.6 million related to our office lease. As of September 30, 2019 , the carrying value of the right-of use asset, which is included in property and equipment, net of deferred rent on the consolidated balance sheets, was approximately $2.6 million . As of September 30, 2019 , the carrying value of the lease liability, which is included in accounts payable and accrued expenses on the consolidated balance sheets, was approximately $3.2 million . The adoption of this ASU had no impact on our consolidated statements of income and cash flows and there was no cumulative-effect adjustment required to opening retained earnings. The following table summarizes the total lease and operating expenses for the three and nine months ended September 30, 2019 and 2018 : September 30, September 30, Three Months Ended $ 239,838 $ 238,014 Nine Months Ended $ 731,366 $ 732,318 The approximate future minimum lease payments under the operating lease are as follows: Future Minimum Lease Payments Three Months 2019 2020 2021 2022 2023 Thereafter Total $ 146,587 $ 614,721 $ 624,179 $ 624,179 $ 624,179 $ 780,223 $ 3,414,068 In addition to the above lease payments, the Company is also responsible for normal operating expenses of the leased property. These operating expenses were approximately $0.4 million in 2018 , and are expected to be approximately the same in 2019 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has determined its interim tax provision projecting an estimated annual effective tax rate. For the nine months ended September 30, 2019 , the Company recorded income tax expense of $14.4 million , yielding an effective tax rate of 24.1% . The effective tax rate of 24.1% differed from the federal statutory tax rate of 21% due primarily to the additional income tax expense recorded in the state and city jurisdictions in which we do business, including new jurisdictions in which we are filing in 2019. This was partially offset by the benefit attributable to redeemable noncontrolling interests. The provision for income taxes includes a benefit attributable to the fact that the Company's operations include the Consolidated Funds which are not subject to federal income taxes. Accordingly, a portion of the Company's earnings are not subject to corporate tax levels. Absent the benefit attributable to redeemable noncontrolling interests, the effective tax rate ("unconsolidated effective tax rate") would have been 25.7% . For the nine months ended September 30, 2018 , the Company recorded income tax expense of $14.4 million , yielding an effective tax rate of 24.6% . The effective tax rate of 24.6% differed from the federal statutory tax rate of 21% due primarily to the additional income tax expense recorded in the state and city jurisdictions in which we do business, including new jurisdictions in which we filed in 2018 , which was partially offset by $0.7 million of excess tax benefits from the vesting of stock awards and the benefit attributable to redeemable noncontrolling interests. The provision for income taxes includes a benefit attributable to the fact that the Company's operations include the Consolidated Funds which are not subject to federal income taxes. Accordingly, a portion of the Company's earnings are not subject to corporate tax levels. Absent the benefit attributable to redeemable noncontrolling interests, the effective tax rate ("unconsolidated effective tax rate") would have been 25.3% . The net temporary differences incurred to date will reverse in future periods as the Company generates taxable earnings. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets recorded. The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of September 30, 2019 and December 31, 2018 , no valuation allowance was deemed necessary. FASB ASC 740, Income Taxes , prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recognizes tax benefits related to positions taken, or expected to be taken, on its tax returns, only if the positions are "more-likely-than-not" sustainable. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. During the nine months ended September 30, 2019 , the Company completed our open examination for tax years 2014 through 2016 with the New York State Department of Finance and Taxation. During the period the Company also filed a Voluntary Disclosure Agreement with the New York City Department of Finance. The Company remains under audit with the California Franchise Tax Board for the Company's 2015 and 2016 tax years. The outcome of open examinations is not expected to have a material impact on the Company's financial statements. The Company believes that some of these audits and negotiations will conclude within the next 12 months and that any change in the amount of uncertain tax positions, including interest due to the settlement of audits, would be immaterial. The amount of uncertain tax positions as of September 30, 2019 , which would impact the Company’s effective tax rate if recognized and a reconciliation of the beginning and ending amounts of uncertain tax positions, is as follows: Nine Months Ended September 30, 2019 Uncertain tax positions, as of January 1, 2019 $ 2,982,337 Gross addition for tax positions of the current year — Gross additions for tax positions of prior years — Reductions of tax positions of prior years for: Lapses of applicable statutes of limitations — Settlements during the period (2,331,711 ) Changes in judgment/excess reserve 10,241 Uncertain tax positions, as of September 30, 2019 $ 660,867 The Company did not recognize additional interest and penalties during the nine months ended September 30, 2019 , related to uncertain tax positions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company’s common shares outstanding consist of all shares issued and outstanding, including unvested restricted shares. Basic and diluted EPS are calculated under the two-class method. Restricted stock units are considered dilutive. The following table sets forth the computation for basic and diluted EPS and reconciliation between basic and diluted shares outstanding: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Net Income $ 11,516,637 $ 16,399,370 $ 45,230,053 $ 44,239,522 Less: Net income attributable to redeemable noncontrolling interest (99,177 ) (1,191,317 ) (3,684,799 ) (1,671,640 ) Net income attributable to common shareholders $ 11,417,460 $ 15,208,053 $ 41,545,254 $ 42,567,882 Weighted average number of outstanding shares - Basic 3,411,632 3,530,586 3,460,959 3,512,547 Dilutive impact of restricted stock units — 1,760 200 1,970 Weighted average number of outstanding shares - Diluted 3,411,632 3,532,346 3,461,159 3,514,517 Earnings per share attributable to common shareholders Basic $ 3.35 $ 4.31 $ 12.00 $ 12.12 Diluted $ 3.35 $ 4.31 $ 12.00 $ 12.11 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company indemnifies its directors, officers and certain of its employees for certain liabilities that might arise from their performance of their duties to the Company. From time to time, the Company is involved in legal matters relating to claims arising in the ordinary course of business. There are currently no such matters pending that the Company believes could have a material adverse effect on its consolidated financial statements. Additionally, in the normal course of business, the Company enters into agreements that contain a variety of representations and warranties and which provide general indemnification obligations. Certain agreements do not contain any limits on the Company’s liability and could involve future claims that may be made against the Company that have not yet occurred. Therefore, it is not possible to estimate the Company’s potential liability under these indemnities. Further, the Company maintains insurance policies that may provide coverage against certain of these liabilities. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 29, 2019 , the Company’s board of directors approved a special cash dividend of $9.00 per share payable December 10, 2019 to shareholders of record on December 2, 2019 . This dividend will reduce shareholders' equity by approximately $30.5 million . |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of September 30, 2019 and December 31, 2018 , and for the three- and nine- month periods ended September 30, 2019 and 2018 , for Diamond Hill Investment Group, Inc. and its subsidiaries (referred to in these notes to the condensed consolidated financial statements as "the Company," "management," "we," "us," and "our") have been prepared in accordance with United States generally accepted accounting principles ("GAAP") and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (the "SEC") Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair statement of the financial condition and results of operations at the dates and for the interim periods presented have been included. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for any full fiscal year. These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements of the Company included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the " 2018 Annual Report") as filed with the SEC. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions related to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
Reclassification | Reclassification Certain prior period amounts and disclosures may have been reclassified to conform to the current period's financial presentation. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the operations of the Company and its controlled subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The Company holds certain investments in the Funds, and previously held an investment in an exchange traded fund (the "ETF") advised by the Company, for general corporate investment purposes, to provide seed capital for newly formed strategies or to add capital to existing strategies. The Funds are organized in a series fund structure in which there are multiple mutual funds within one Trust. The Trust is an open-end investment company registered under the Investment Company Act of 1940, as amended (the"1940 Act"). The ETF was an individual series of ETF Series Solutions which was also an open-end investment company registered under the 1940 Act. The ETF liquidated and its assets were distributed to its shareholders on April 5, 2019. Each of the individual mutual funds represents (and the ETF represented) a separate share class of a legal entity organized under the Trust. The Company performs its analysis at the individual mutual fund and ETF level and has concluded the mutual funds are, and the ETF was, voting rights entities ("VREs") because the structure of the investment product is such that the shareholders are deemed to have the power through voting rights to direct the activities that most significantly impact the entity's economic performance. To the extent material, these investment products are consolidated if Company ownership, directly or indirectly, represents a majority interest (greater than 50%). The Company records redeemable noncontrolling interests in consolidated investments for which the Company's ownership is less than 100%. The Company has consolidated the Diamond Hill International Fund and the Diamond Hill Global Fund (collectively the "Consolidated Funds") as of September 30, 2019 . The Company deconsolidated the ETF, the Diamond Hill Core Bond Fund and the Diamond Hill High Yield Fund during the nine months ended September 30, 2019 , as the Company's ownership declined to less than 50%. DHCM is the managing member of Diamond Hill General Partner, LLC (the “General Partner”), which is the general partner of Diamond Hill Investment Partners, L.P. (“DHIP”) whose underlying assets consist primarily of marketable securities. DHCM is wholly owned by the Company and is consolidated by us. Further, DHCM, through its control of the General Partner, has the power to direct DHIP's economic activities and the right to receive investment advisory fees that may be significant to DHIP. The Company concluded it did not have a variable interest in DHIP as the fees paid to the General Partner are considered to contain customary terms and conditions as found in the market for similar products and the Company has no equity ownership in DHIP. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest Redeemable noncontrolling interest represents third-party interests in the Consolidated Funds. This interest is redeemable at the option of the investors and therefore is not treated as permanent equity. Redeemable noncontrolling interest is recorded at redemption value, which approximates the fair value each reporting period. |
Segment Information | Segment Information Management has determined that the Company operates in one business segment, providing investment management and administration services to mutual funds, separately managed accounts, and a private investment fund. Therefore, no disclosures relating to operating segments are presented in the Company's annual or interim financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Investments | Investments Management determines the appropriate classification of its investments at the time of purchase and re-evaluates its determination at each reporting period. Investments in the Funds we advise where the Company has neither control nor the ability to exercise significant influence, as well as securities held in the Consolidated Funds, are measured at fair value based on quoted market prices. Unrealized gains and losses are recorded as investment income (loss) in the Company's consolidated statements of income. Investments classified as equity method investments represent investments in which the Company owns between 20-50% of the outstanding voting interests in the entity or when it is determined that the Company is able to exercise significant influence but not control over the investments. When using the equity method, the Company recognizes its respective share of the investee's net income or loss for the period, which is recorded as investment income in the Company's consolidated statements of income. |
Property and Equipment | Property and Equipment Property and equipment, consisting of leasehold improvements, right-of use lease assets, computer equipment, furniture, and fixtures, are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated lives of the assets. |
Revenue Recognition | Revenue Recognition – Mutual Fund Administration DHCM has an administrative and transfer agency services agreement with the Funds under which DHCM performs certain services for each Fund. These services include performance obligations, such as mutual fund administration, fund accounting, transfer agency, and other related functions. These services are performed concurrently under our agreement with the Funds, all performance obligations to provide these administrative services are satisfied over time, and the Company recognizes revenue as time passes. For performing these services each Fund pays DHCM a fee, which is calculated using an annual rate times the average daily net assets of each respective share class. These fees are thereby constrained and represent variable consideration, and are excluded from revenue until the AUM on which we bill the Funds is no longer subject to market fluctuations. The Funds have selected and contractually engaged certain vendors to fulfill various services to benefit the Funds’ shareholders or to satisfy regulatory requirements of the Funds. These services include, among others, required shareholder mailings, federal and state registrations, and legal and audit services. DHCM, in fulfilling a portion of its role under the administration agreement with the Funds, acts as agent to pay these obligations of the Funds. Each vendor is independently responsible for fulfillment of the services it has been engaged to provide and negotiates its fees and terms directly with the management and board of trustees of the Funds. The fee that each Fund pays to DHCM is reviewed annually by the Funds’ board of trustees and specifically takes into account the contractual expenses that DHCM pays on behalf of the Funds. As a result, DHCM is not involved in the delivery or pricing of these services, and bears no risk related to these services. Revenue has been recorded net of these Fund related expenses. In addition, DHCM advances the upfront commissions that are paid to brokers who sell Class C shares of the Funds. These advances are capitalized and amortized over 12 months to correspond with the repayments DHCM receives from the principal underwriter to recoup this commission advancement. Revenue Recognition – Investment Advisory Fees The Company's investment advisory contracts have a single performance obligation (the investment advisory services provided to the client) as the promised services are not separately identifiable from other promises in the contracts and, therefore, are not distinct. All performance obligations to provide advisory services are satisfied over time and the Company recognizes revenue as time passes. The fees we receive for our services under our investment advisory contracts are based on our AUM, which changes based on the value of securities held under each advisory contract. These fees are thereby constrained and represent variable consideration, and are excluded from revenue until the AUM on which our client is billed is no longer subject to market fluctuations. Revenue Recognition – Variable Rate Fees The Company manages certain client accounts that provide for variable rate fees. These fees are calculated based on client investment results over rolling 5 Revenue Recognition – General |
Income Taxes | Income Taxes The Company accounts for current and deferred income taxes through an asset and liability approach. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company is subject to examination by federal and applicable state and local jurisdictions for various tax periods. The Company’s income tax positions are based on research and interpretations of the income tax laws and rulings in each of the jurisdictions in which it does business. Due to the subjectivity of interpretations of laws and rulings in each jurisdiction, the differences and interplay in tax laws among those jurisdictions, and the inherent uncertainty in estimating the final resolution of complex tax audit matters, the Company’s estimates of income tax liabilities may differ from actual payments or assessments. The Company regularly assesses its position with regard to tax exposures and records liabilities for these uncertain tax positions and related interest and penalties, if any, according to the principles of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes . The Company records interest and penalties within income tax expense on the income statement. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, which includes participating securities. Diluted EPS reflects the potential dilution of EPS due to unvested restricted stock units. See Note 9 . |
Newly Issued But Not Yet Adopted Accounting Guidance | Newly Issued But Not Yet Adopted Accounting Guidance In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, “Fair Value Measurements.” This update makes certain removals from, changes to and additions to existing disclosure requirements for fair value measurement. ASU 2018-13 does not change fair value measurements already required or permitted by existing standards. ASU 2018-13 is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management does not believe that adoption of ASU 2018-13 will materially impact the Company’s financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | Revenue earned during the three months ended September 30, 2019 and 2018 under contracts with clients include: Three Months Ended September 30, 2019 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 24,178,440 $ 2,094,271 $ 26,272,711 Sub-advised funds and separately managed accounts 8,319,661 — 8,319,661 $ 32,498,101 $ 2,094,271 $ 34,592,372 Three Months Ended September 30, 2018 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 26,864,835 $ 2,543,442 $ 29,408,277 Sub-advised funds and separately managed accounts 8,063,370 — 8,063,370 $ 34,928,205 $ 2,543,442 $ 37,471,647 Revenue earned during the nine months ended September 30, 2019 and 2018 under contracts with clients include: Nine Months Ended September 30, 2019 Investment advisory Mutual fund administration, net Total revenue Proprietary funds $ 72,093,686 $ 6,195,272 $ 78,288,958 Sub-advised funds and separately managed accounts 22,427,805 — 22,427,805 $ 94,521,491 $ 6,195,272 $ 100,716,763 Nine Months Ended September 30, 2018 Investment advisory Mutual fund Total revenue Proprietary funds $ 80,464,941 $ 8,095,596 $ 88,560,537 Sub-advised funds and separately managed accounts 22,620,826 — 22,620,826 $ 103,085,767 $ 8,095,596 $ 111,181,363 |
Assets under Management (AUM) Subject to Incentive Fees and Incentive Fees | The table below shows AUM subject to variable rate fees and the amount of variable rate fees that would be recognized based upon investment results as of September 30, 2019 : As of September 30, 2019 AUM subject to variable rate fees Unearned variable rate fees Contractual Period Ending: Quarter Ending December 31, 2019 $ 62,831,955 $ 612,273 Quarter Ending March 31, 2020 13,476,137 — Quarter Ending September 30, 2020 37,469,889 179,474 Quarter Ending September 30, 2021 284,414,344 6,328,189 Total $ 398,192,325 $ 7,119,936 |
Mutual Fund Administration Gross and Net Revenue | Mutual fund administration gross and net revenue are summarized below: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Mutual fund administration: Administration revenue, gross $ 5,677,414 $ 6,169,984 $ 16,599,581 $ 18,771,040 Fund related expense (3,589,273 ) (3,638,618 ) (10,430,419 ) (10,702,498 ) Revenue, net of related expenses 2,088,141 2,531,366 6,169,162 8,068,542 DHCM C-Share financing: Broker commission advance repayments 57,908 84,248 176,901 264,107 Broker commission amortization (51,778 ) (72,172 ) (150,791 ) (237,053 ) Financing activity, net 6,130 12,076 26,110 27,054 Mutual fund administration revenue, net $ 2,094,271 $ 2,543,442 $ 6,195,272 $ 8,095,596 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Market Value of Investments | The following table summarizes the carrying value of these investments as of September 30, 2019 and December 31, 2018 : As of September 30, 2019 December 31, 2018 Fair value investments: Securities held in Consolidated Funds (a) $ 29,635,079 $ 153,730,480 Company sponsored investments 43,200,396 33,418,088 Company sponsored equity method investments 61,143,224 16,339,649 Total Investments $ 133,978,699 $ 203,488,217 (a) Of the securities held in the Consolidated Funds as of September 30, 2019 , $18.8 million were held directly by the Company and $10.8 million were held by noncontrolling shareholders. Of the securities held in the Consolidated Funds as of December 31, 2018 , $84.7 million were held directly by the Company and $69.0 million were held by noncontrolling shareholders. |
Equity Method Investments | The following table includes the condensed summary financial information from the Company's equity method investments as of and for the periods ended September 30, 2019 : As of September 30, 2019 Total assets $ 236,700,619 Total liabilities 41,168,623 Net assets 195,531,996 DHCM's portion of net assets 61,143,224 For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Investment income $ 962,281 $ 4,148,489 Expenses 345,111 955,320 Net realized gains 858,741 5,243,737 Net change in unrealized appreciation 1,719,459 11,782,498 Net income 3,195,370 20,219,404 DHCM's portion of net income 1,196,750 7,014,994 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table summarizes investments that are recognized in our consolidated balance sheet using fair value measurements (excluding investments classified as equity method investments) determined based upon the differing levels as of September 30, 2019 : Level 1 Level 2 Level 3 Total Cash equivalents (money market mutual funds) $ 116,193,674 $ — $ — $ 116,193,674 Fair value investments Securities held in Consolidated Funds (a) 15,480,312 14,154,767 — $ 29,635,079 Company sponsored investments 43,200,396 — — $ 43,200,396 (a) Of the securities held in the Consolidated Funds as of September 30, 2019 , $18.8 million were held directly by the Company and $10.8 million were held by noncontrolling shareholders. |
Compensation Plans (Tables)
Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Roll-Forward of Outstanding Restricted Stock Grants Issued | The following table represents a roll-forward of outstanding restricted stock and related activity during the nine months ended September 30, 2019 : Shares Weighted-Average Grant Date Price per Share Outstanding restricted stock as of December 31, 2018 214,575 $ 177.22 Grants issued 49,269 146.81 Grants vested (17,000 ) 126.13 Grants forfeited (11,700 ) 181.83 Total outstanding restricted stock as of September 30, 2019 235,144 $ 174.44 |
Expense Recognition of Deferred Compensation | The recognition of compensation expense related to deferred compensation over the remaining vesting periods is as follows: Three Months 2019 2020 2021 2022 2023 Thereafter Total $ 1,888,550 $ 6,533,106 $ 5,252,547 $ 4,270,399 $ 2,174,456 $ 2,120,424 $ 22,239,482 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value | The following table represents common shares issued as part of our incentive compensation program during the nine months ended September 30, 2019 and 2018 : Shares Issued Grant Date Value September 30, 2019 24,048 $ 3,655,296 September 30, 2018 20,153 $ 4,109,197 |
Operating Lease (Tables)
Operating Lease (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Total Lease and Operating Expenses | The following table summarizes the total lease and operating expenses for the three and nine months ended September 30, 2019 and 2018 : September 30, September 30, Three Months Ended $ 239,838 $ 238,014 Nine Months Ended $ 731,366 $ 732,318 |
Future Minimum Lease Payments under Operating Leases | The approximate future minimum lease payments under the operating lease are as follows: Future Minimum Lease Payments Three Months 2019 2020 2021 2022 2023 Thereafter Total $ 146,587 $ 614,721 $ 624,179 $ 624,179 $ 624,179 $ 780,223 $ 3,414,068 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of uncertain tax positions | The amount of uncertain tax positions as of September 30, 2019 , which would impact the Company’s effective tax rate if recognized and a reconciliation of the beginning and ending amounts of uncertain tax positions, is as follows: Nine Months Ended September 30, 2019 Uncertain tax positions, as of January 1, 2019 $ 2,982,337 Gross addition for tax positions of the current year — Gross additions for tax positions of prior years — Reductions of tax positions of prior years for: Lapses of applicable statutes of limitations — Settlements during the period (2,331,711 ) Changes in judgment/excess reserve 10,241 Uncertain tax positions, as of September 30, 2019 $ 660,867 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation for Earnings Per Share | The following table sets forth the computation for basic and diluted EPS and reconciliation between basic and diluted shares outstanding: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Net Income $ 11,516,637 $ 16,399,370 $ 45,230,053 $ 44,239,522 Less: Net income attributable to redeemable noncontrolling interest (99,177 ) (1,191,317 ) (3,684,799 ) (1,671,640 ) Net income attributable to common shareholders $ 11,417,460 $ 15,208,053 $ 41,545,254 $ 42,567,882 Weighted average number of outstanding shares - Basic 3,411,632 3,530,586 3,460,959 3,512,547 Dilutive impact of restricted stock units — 1,760 200 1,970 Weighted average number of outstanding shares - Diluted 3,411,632 3,532,346 3,461,159 3,514,517 Earnings per share attributable to common shareholders Basic $ 3.35 $ 4.31 $ 12.00 $ 12.12 Diluted $ 3.35 $ 4.31 $ 12.00 $ 12.11 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Business Organization And Significant Accounting Policies [Line Items] | |||||
Number of business segment | Segment | 1 | ||||
Accounts receivable, related parties | $ 9,900,000 | $ 9,900,000 | $ 9,400,000 | ||
Client performance period | 5 years | ||||
Revenue | 34,592,372 | $ 37,471,647 | $ 100,716,763 | $ 111,181,363 | |
Advance commissions amortization period | 12 months | ||||
Variable Rate Fees | |||||
Business Organization And Significant Accounting Policies [Line Items] | |||||
Revenue | $ 900,000 | $ 600,000 | $ 900,000 | $ 600,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Revenues From Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 34,592,372 | $ 37,471,647 | $ 100,716,763 | $ 111,181,363 |
Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,498,101 | 34,928,205 | 94,521,491 | 103,085,767 |
Mutual fund administration revenue, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,094,271 | 2,543,442 | 6,195,272 | 8,095,596 |
Proprietary funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 26,272,711 | 29,408,277 | 78,288,958 | 88,560,537 |
Proprietary funds | Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 24,178,440 | 26,864,835 | 72,093,686 | 80,464,941 |
Proprietary funds | Mutual fund administration revenue, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,094,271 | 2,543,442 | 6,195,272 | 8,095,596 |
Sub-advised funds and separately managed accounts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8,319,661 | 8,063,370 | 22,427,805 | 22,620,826 |
Sub-advised funds and separately managed accounts | Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8,319,661 | 8,063,370 | 22,427,805 | 22,620,826 |
Sub-advised funds and separately managed accounts | Mutual fund administration revenue, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Significant Accounting Polici_6
Significant Accounting Policies - Assets under Management (AUM) Subject to Incentive Fees and Incentive Fees (Detail) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Quarter Ending December 31, 2019 | |
Principal Transaction Revenue [Line Items] | |
AUM subject to variable rate fees | $ 62,831,955 |
Unearned variable rate fees | 612,273 |
Quarter Ending March 31, 2020 | |
Principal Transaction Revenue [Line Items] | |
AUM subject to variable rate fees | 13,476,137 |
Unearned variable rate fees | 0 |
Quarter Ending September 30, 2020 | |
Principal Transaction Revenue [Line Items] | |
AUM subject to variable rate fees | 37,469,889 |
Unearned variable rate fees | 179,474 |
Quarter Ending September 30, 2021 | |
Principal Transaction Revenue [Line Items] | |
AUM subject to variable rate fees | 284,414,344 |
Unearned variable rate fees | 6,328,189 |
Total | |
Principal Transaction Revenue [Line Items] | |
AUM subject to variable rate fees | 398,192,325 |
Unearned variable rate fees | $ 7,119,936 |
Significant Accounting Polici_7
Significant Accounting Policies - Mutual Fund Administration Gross and Net Revenue (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 34,592,372 | $ 37,471,647 | $ 100,716,763 | $ 111,181,363 |
Administration revenue, gross | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 5,677,414 | 6,169,984 | 16,599,581 | 18,771,040 |
Fund related expense | ||||
Revenue from External Customer [Line Items] | ||||
Expenses | 3,589,273 | 3,638,618 | 10,430,419 | 10,702,498 |
Revenue, net of related expenses | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 2,088,141 | 2,531,366 | 6,169,162 | 8,068,542 |
Broker Commission | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 57,908 | 84,248 | 176,901 | 264,107 |
Expenses | 51,778 | 72,172 | 150,791 | 237,053 |
Financing activity, net | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 6,130 | 12,076 | 26,110 | 27,054 |
Mutual fund administration revenue, net | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 2,094,271 | $ 2,543,442 | $ 6,195,272 | $ 8,095,596 |
Investments - Summary of Market
Investments - Summary of Market Value of Investments (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Investment Holdings [Line Items] | ||
Company sponsored equity method investments | $ 61,143,224 | $ 16,339,649 |
Total Investments | 133,978,699 | 203,488,217 |
Securities held in Consolidated Funds | ||
Investment Holdings [Line Items] | ||
Fair value investments | 29,635,079 | 153,730,480 |
Securities held in Consolidated Funds | Parent | ||
Investment Holdings [Line Items] | ||
Fair value investments | 18,800,000 | 84,700,000 |
Securities held in Consolidated Funds | Redeemable Noncontrolling Interest | ||
Investment Holdings [Line Items] | ||
Fair value investments | 10,800,000 | 69,000,000 |
Company sponsored investments | ||
Investment Holdings [Line Items] | ||
Fair value investments | $ 43,200,396 | $ 33,418,088 |
Investments Schedule of Equity
Investments Schedule of Equity Method Investment Ownership (Details) | Sep. 30, 2019 |
Research Opportunities Fund | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 22.00% |
Core Bond Fund | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 38.00% |
Investments - Equity Method Inv
Investments - Equity Method Investments (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Investments, Debt and Equity Securities [Abstract] | ||
Total assets | $ 236,700,619 | $ 236,700,619 |
Total liabilities | 41,168,623 | 41,168,623 |
Net assets | 195,531,996 | 195,531,996 |
DHCM's portion of net assets | 61,143,224 | 61,143,224 |
Investment income | 962,281 | 4,148,489 |
Expenses | 345,111 | 955,320 |
Net realized gains | 858,741 | 5,243,737 |
Net change in unrealized appreciation | 1,719,459 | 11,782,498 |
Net income | 3,195,370 | 20,219,404 |
DHCM's portion of net income | $ 1,196,750 | $ 7,014,994 |
Fair Value Measurements Summary
Fair Value Measurements Summary of Investment Values Based Upon Fair Value Hierarchy (Detail) | Sep. 30, 2019USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | $ 116,193,674 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 116,193,674 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash equivalents | 0 |
Securities held in Consolidated Funds | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 29,635,079 |
Securities held in Consolidated Funds | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 15,480,312 |
Securities held in Consolidated Funds | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 14,154,767 |
Securities held in Consolidated Funds | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 0 |
Company sponsored investments | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 43,200,396 |
Company sponsored investments | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 43,200,396 |
Company sponsored investments | Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | 0 |
Company sponsored investments | Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value investments | $ 0 |
Fair Value Measurements Textual
Fair Value Measurements Textual (Details) - Securities held in Consolidated Funds - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investments | $ 29,635,079 | $ 153,730,480 |
Parent | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investments | 18,800,000 | 84,700,000 |
Redeemable Noncontrolling Interest | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value investments | $ 10,800,000 | $ 69,000,000 |
Line of Credit (Details)
Line of Credit (Details) - The Credit Agreement - Line of Credit | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Line of Credit Facility [Line Items] | |
Maximum borrowing amount | $ 25,000,000 |
Commitment fee rate on unused borrowings | 0.10% |
Borrowing under line of credit facility | $ 0 |
London Interbank Offered Rate (LIBOR) | |
Line of Credit Facility [Line Items] | |
Line of credit facility, interest rate description | 1.00% |
Compensation Plans - Roll-Forwa
Compensation Plans - Roll-Forward of Outstanding Restricted Stock Grants Issued (Detail) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares | |
Outstanding shares, Beginning Balance (shares) | 211,575 |
Outstanding shares, Ending Balance (shares) | 235,144 |
Restricted stock | |
Shares | |
Outstanding shares, Beginning Balance (shares) | 214,575 |
Shares issued (shares) | 49,269 |
Grants vested (shares) | (17,000) |
Grants forfeited (shares) | (11,700) |
Outstanding shares, Ending Balance (shares) | 235,144 |
Weighted-Average Grant Date Price per Share | |
Outstanding, Beginning of Period (usd per share) | $ / shares | $ 177.22 |
Grants issued (usd per share) | $ / shares | 146.81 |
Grants vested (usd per share) | $ / shares | 126.13 |
Grants forfeited (usd per share) | $ / shares | 181.83 |
Outstanding, End of Period (usd per share) | $ / shares | $ 174.44 |
Compensation Plans - Expense Re
Compensation Plans - Expense Recognition of Deferred Compensation (Detail) - Restricted stock | Sep. 30, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2019 (Remaining Period) | $ 1,888,550 |
2020 | 6,533,106 |
2021 | 5,252,547 |
2022 | 4,270,399 |
2023 | 2,174,456 |
Thereafter | 2,120,424 |
Total | $ 22,239,482 |
Compensation Plans - Schedule o
Compensation Plans - Schedule of Grants Issued and Grant Date Fair Value (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Issuance of stock grants | $ 3,655,296 | $ 4,109,197 |
Shares Issued | ||
Shares issued (shares) | 24,048 | 20,153 |
Grant Date Value | ||
Shares issued (shares) | 24,048 | 20,153 |
Issuance of stock grants | $ 3,655,296 | $ 4,109,197 |
Compensation Plans - Narrative
Compensation Plans - Narrative (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred compensation equity | $ (22,239,482) | $ (22,008,054) |
Fully vested employee elected deferral period | 5 years | |
Deferred compensation liability | $ 28,416,798 | $ 22,387,874 |
2014 Equity and Cash Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares available for issuance (in shares) | 230,242 |
Operating Lease - Narrative (De
Operating Lease - Narrative (Detail) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)ft²location | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | |
Area of operating lease | ft² | 37,829 | ||
Number of office space locations | location | 1 | ||
Operating lease, right-of-use asset | $ 2.6 | ||
Operating lease, liability | $ 3.2 | ||
Operating lease expense excluding rent | $ 0.4 | ||
Accounting Standards Update 2016-02 | |||
Operating lease, right-of-use asset | $ 2.9 | ||
Operating lease, liability | $ 3.6 |
Operating Lease - Summary of To
Operating Lease - Summary of Total Lease and Operating Expenses (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Lease and operating expenses | $ 239,838 | $ 731,366 | ||
Lease and operating expenses | $ 238,014 | $ 732,318 |
Operating Lease - Future Minimu
Operating Lease - Future Minimum Lease Payments under Operating Leases (Detail) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 146,587 |
2020 | 614,721 |
2021 | 624,179 |
2022 | 624,179 |
2023 | 624,179 |
Thereafter | 780,223 |
Total future lease payments due | $ 3,414,068 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Contingency [Line Items] | ||||
Income tax expense | $ 4,062,849 | $ 5,726,807 | $ 14,367,605 | $ 14,446,092 |
Effective tax rate | 24.10% | 24.60% | ||
Federal statutory income tax rate, percent | 21.00% | 21.00% | ||
Parent Company | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 25.70% | 25.30% |
Income Taxes Roll Forward of Un
Income Taxes Roll Forward of Uncertain Tax Positions (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |
Unrecognized tax benefits, beginning of period | $ 2,982,337 |
Gross addition for tax positions of the current year | 0 |
Gross additions for tax positions of prior years | 0 |
Reductions of tax positions of prior years for: | |
Lapses of applicable statutes of limitations | 0 |
Settlements during the period | (2,331,711) |
Changes in judgment/excess reserve | 10,241 |
Unrecognized tax benefits, end of period | $ 660,867 |
Earnings Per Share - Computatio
Earnings Per Share - Computation for Earnings Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net Income | $ 11,516,637 | $ 16,399,370 | $ 45,230,053 | $ 44,239,522 |
Less: Net income attributable to redeemable noncontrolling interest | (99,177) | (1,191,317) | (3,684,799) | (1,671,640) |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 11,417,460 | $ 15,208,053 | $ 41,545,254 | $ 42,567,882 |
Weighted average shares outstanding | ||||
Weighted average number of outstanding shares - Basic (in shares) | 3,411,632 | 3,530,586 | 3,460,959 | 3,512,547 |
Dilutive impact of restricted stock units (in shares) | 0 | 1,760 | 200 | 1,970 |
Weighted average number of outstanding shares - Diluted (in shares) | 3,411,632 | 3,532,346 | 3,461,159 | 3,514,517 |
Earnings per share | ||||
Basic (USD per share) | $ 3.35 | $ 4.31 | $ 12 | $ 12.12 |
Diluted (USD per share) | $ 3.35 | $ 4.31 | $ 12 | $ 12.11 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event $ / shares in Units, $ in Millions | Oct. 29, 2019USD ($)$ / shares |
Subsequent Event [Line Items] | |
Dividends declared (in usd per share) | $ | $ 30.5 |
Dividends to be paid in cash | $ / shares | $ 9 |