Type Private Area served Worldwide Founded 1931 | Industry Financial services Founder Jonathan Bell Lovelace Number of employees 7,000 | |
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Key people Capital Group Management Committee:
Tim Armour
Kevin Clifford
Phil de Toledo
Darcy Kopcho
Rob Lovelace
Martin Romo
Brad Vogt Products Mutual fund, Private wealth management, Private equity investing, Retirement plan services AUM US$ 1.5 trillion
(August 27, 2016) Headquarters Los Angeles, California, United States Subsidiaries American Funds, Bayer | ||
Capital Group is an American financial services company, it ranks among the world’s oldest and largest investment management organizations, with $1.39 trillion in assets under management. Founded in Los Angeles, California in 1931, it is privately held and has offices around the globe in the Americas, Asia, Australia and Europe. Capital offers a range of products, including more than 40 mutual funds through its subsidiary, American Funds, as well as separately managed accounts (or collective investment trusts), private equity, investment services for high net worth investors in the U.S., and a range of other offerings for institutional clients and individual investors globally.
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Investment Philosophy
investment philosophy, based on active portfolio management and in-house research to drive long-term investment results, has been consistent since the company was founded. The firm is known for its long-term focus and research-based approach and maintains a large in-house research team that develops proprietary insights into investment decisions. The Capital Group companies manage equity assets through three investment groups that make investment and proxy voting decisions independently.
History
In 1931, Jonathan Bell Lovelace founded the investment firm, Lovelace, Dennis & Renfrew, which would eventually become Capital Group. Lovelace had previously been a partner in the stock brokerage firm E.E. MacCrone, where he explored the concept of developing an open-end mutual fund. He eventually sold his stake in that company, just prior to the Wall Street Crash of 1929.
In 1933, Lovelace’s firm took over management of The Investment Company of America, which he had launched at E.E. MacCrone in 1927. For the next 20 years, his firm enjoyed modest success. As mutual funds gained in popularity in the 1950s, Capital’s roster of mutual funds grew.
The International Resources Fund, established in 1955, was Capital’s first foray into international investing. A year earlier, Lovelace had established an international investment staff at the urging of his son, Jon Lovelace, Jr. The establishment of the firm’s first overseas research office in Geneva followed in 1962.
In 1958, Jon Lovelace, Jr. introduced a new system of managing the firm’s mutual funds and accounts. Rather than assign a portfolio to a single manager, he divided each portfolio among several managers. Each manager would share ideas with peers but have total discretion over a section of the portfolio. Known today as The Capital System, it avoids the phenomenon of creating single-manager “stars,” who can impact a fund’s results should they leave. In the mid-1960s, Capital began to include research analysts in the management of the portfolios, reserving a portion of each to allow analysts to pursue their highest conviction investment ideas.
Capital Group’s long-term approach has helped it avoid some of the pitfalls that have plagued other firms. In the late 1990s, the firm was criticized for not offering then-popular tech funds. But when the tech bubble burst, Capital was praised for not jumping on the bandwagon.
In the early 2000s, new share classes and offerings were introduced, such as a 529 college savings plan and retirement target date funds. Named for the expected year of withdrawal, the target date funds automatically rebalance their mix of equities and fixed-income holdings as the investor approaches the expected date of retirement.
Today, Capital Group has expanded its mutual fund offerings outside the U.S. to include Europe, Canada and Asia and provides research and investment services to institutional investors around the globe.
Accolades
Morningstar found that Capital Group’s American Funds created the most wealth for investors in the period between December 31, 1999, and December 31, 2009.
Many of the firm’s funds were also included in Morningstar’s “Fantastic 50” in 2015 and its “Fantastic 48” in 2014.
Offices
Capital Group employs more than 7,000 associates worldwide. North American locations include Atlanta, Los Angeles, New York, San Francisco, Toronto and Washington, D.C. As part of expansion plans in Europe, Capital Group established a presence in Frankfurt, Madrid, Milan and Zurich, adding to its offices in Geneva, London and Luxembourg. Its Asia offices include Beijing, Hong Kong, Mumbai, Singapore and Tokyo. Capital Group also has a growing presence in Sydney and a private equity office in São Paulo.
Canada
United States
Australia
China
Hong Kong
Philippines
Singapore
South Korea
Europe
Commerzbank AG