Small Cap
The Small Cap Strategy invests in a diversified portfolio of small capitalization companies, which tend to be underfollowed and in the early stages of their growth potential.
Objective
The VELA Small Cap Strategy seeks to achieve favorable risk-adjusted returns by investing in businesses that are trading at a discount to our estimate of intrinsic value.
Through our research process, we aim to identify durable, well-capitalized businesses run by strong management teams whose incentives are well-aligned with shareholders. We employ absolute levels of diversification using our assessment of discount to our estimates of intrinsic value, management teams, and business characteristics to construct our portfolio.
In certain vehicles, the Strategy may write covered calls on an opportunistic basis with the aim of enhancing tax efficiency and mitigating risk.
Guidelines
Benchmark:
Russell 2000
Typical Number of Positions:
40-60
Maximum Position Size:
6%
Top 10 Holdings Concentration:
>25%
Maximum Industry Exposure:
20%
Maximum Sector Exposure:
30%
Maximum Cash Position:
20%
STRATEGY FACTS
As of 12.31.25
Composite Inception
10.01.20
Assets Under Management
AUM
$161M
Investment Vehicles
Mutual Fund, SMA
Standard Minimum
$2,500 (Class I);
$5,000,000 (SMA)
PORTFOLIO MANAGERS
Jenny Hubbard, CFA
Lead Portfolio Manager
& Research Analyst
30 Years Investment Experience
Jenny joined VELA in 2020 and has served as the primary decisionmaker on the Small Cap strategy since inception. Jenny is also a partner in our firm.
Jenny’s industry experience prior to VELA includes research-focused positions with ABN/AMRO LaSalle Bank, Avondale Partners, and most recently, Diamond Hill Capital Management, where she was recruited by then-CEO Ric Dillon in 2007.
Over her 13 years at Diamond Hill, Jenny served first as a Research Analyst and later as Assistant Portfolio Manager of the Small-Mid and Mid Cap Strategies.
Jenny holds a M.A. from Stanford University and a B.A. from The University of Colorado
Ric Dillon, CFA
CEO, CIO
& Portfolio Manager
49 Years Investment Experience
Ric is one of our firm’s founders and has served as CEO and CIO since VELA’s inception.
Ric began his investment career with Ohio Public Employees Retirement System. From 1986 to 1993, Ric served as a Portfolio Manager at Loomis, Sayles & Company. In the 1990s, Ric founded Dillon Capital Management, where he served as President and Chief Investment Officer until the company was acquired by Loomis, Sayles & Company, where he returned to work as a Portfolio Manager until 2000.
In May 2000, Ric founded Diamond Hill Capital Management, where he served as CEO and Portfolio Manager on their Small Cap and Long-Short Strategies. Diamond Hill Capital Management is a wholly owned subsidiary of Diamond Hill Investment Group, which is publicly traded on the NASDAQ under the ticker, DHIL.
Ric holds an M.B.A. from the University of Dayton, and both an M.S. and B.S. from The Ohio State University.
Jason Downey, CFA
Portfolio Manager
& Research Analyst
24 Years Investment Experience
Jason joined VELA in 2020 and has served as a Portfolio Manager on the All Cap Concentrated and Income Opportunities strategies since inception and as a Portfolio Manager on the Small Cap strategy since October 2024. Jason is also a partner in our firm.
Jason began his investment career at Diamond Hill Capital Management in 2002, among the first research associates hired. Over his 18-year tenure at the firm, he held various roles, including Research Analyst, Sector Leader of the Industrials, Materials, Energy and Transportation Team, and Co-Director of Research.
Most recently, Jason served as Co-Portfolio Manager of Diamond Hill’s Long-Short Strategy.
Jason holds a B.A. from Ohio Wesleyan University.
