Capital Cities reviews 2025 performance and trustees approve River Road as replacement manager

Capital Cities presented a market review and recommended an active replacement for a small-cap value sleeve after the Prospector Opportunity Fund announced it would close.

Corey Waddell of Capital Cities summarized 2025 market performance and the firm’s recommendation. Waddell said the portfolio ended 2025 at $207,160,487 and reported year-to-date performance that pushed the portfolio to about $211,631,000 as of the most recent close. He described fixed-income returns and a market environment in which a small number of large-cap stocks heavily influenced broad equity indices, making active small-cap selection both more important and more challenging for outperformance.

Waddell told trustees the Prospector fund’s senior managers decided to retire and close the fund; assets were temporarily placed in the Vanguard Small Cap Value Index Fund as a placeholder while Capital Cities conducted a search. The search yielded three active candidates: River Road Asset Management (noted for downside protection and a concentrated approach), Boston Partners (larger, more diversified), and Diamond Hill (a smaller boutique firm).

Capital Cities recommended River Road as the preferred replacement, citing downside capture and a consistent process. Trustees moved, seconded and approved the recommendation by roll call. After the vote, Capital Cities said it would send trade instructions and the administrative paperwork necessary to transition assets and to raise the annual distribution as previously discussed.

Trustees requested comparative performance data between the active candidates and the Vanguard index option; Capital Cities offered to return with that analysis if the board wanted additional detail before future votes.

Next steps: Capital Cities will submit trade sheets and coordinate with staff on operations to complete the manager transition.