The firm receives an Average Parent rating.
While since-inception performance of many of this quality growth shop’s funds are sound, LKCM’s performance edge has waned: Flagships LKCM Equity and LKCM Small Cap Equity have lagged peers over the trailing 10 years through September 2022. The firm deserves credit for having a well-articulated process that is consistent across its strategies, but this slump has led to significant redemptions; the firm’s total net assets for its mutual funds are just over $1 billion as of September 2022 compared with its previous highs of over $2 billion throughout 2014.
Its passionate founder, Luther King, 82, remains active at the company in several leadership roles. The firm has focused on managing high-net-worth clients, and its mutual funds are mostly spinoffs from separately managed accounts created for this clientele. The vast majority of the firm’s $23 billion sat in these accounts as of June 2022, so fund outflows are not as significant a risk as they could be. Seventeen employees other than King have an ownership stake in LKCM, of which two are his sons. This should help to smooth the transition once Luther King retires, but what the firm will ultimately look like remains unclear.