Capital Group is an American
financial services company. It ranks among the world's oldest and largest
investment management organizations, with over $2.6 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
The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World.
Along with t ...
,
Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an area ...
,
Australia and
Europe.
Capital offers a range of products focused on
active management
Active management (also called ''active investing'') is an approach to investing. In an actively managed portfolio of investments, the investor selects the investments that make up the portfolio. Active management is often compared to passive ma ...
, including more than 40 mutual funds through its
subsidiary, American Funds Distributors, as well as separately managed accounts (or collective
investment trust
An investment trust is a form of investment fund found mostly in the United Kingdom and Japan. Investment trusts are constituted as public limited companies and are therefore closed ended since the fund managers cannot redeem or create shares.
...
s),
private equity, investment services for high
net worth
Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Since financial assets minus outstanding liabilities equal net financial assets, net ...
investor
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Typ ...
s in the U.S., and a range of other offerings for institutional clients and individual investors globally.
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
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be conf ...
''E.E. MacCrone'', where he explored the concept of developing an
open-end mutual fund. He eventually sold his stake in that company, just before the
Wall Street Crash of 1929
The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange coll ...
.
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 1954, 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
Discretion has the meaning of acting on one's own authority and judgment. In law, discretion as to legal rulings, such as whether evidence is excluded at a trial, may be exercised by a judge. Some view discretion negatively, while some view it ...
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.
Former British PM
Theresa May
Theresa Mary May, Lady May (; née Brasier; born 1 October 1956) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 2016 to 2019. She previously served in David Cameron's cab ...
's husband
Philip May
Sir Philip John May (born 18 September 1957) is an English investment manager. He is the husband of Theresa May, who was Prime Minister of the United Kingdom from 2016 to 2019.
Early life
May was born in Norwich in 1957. His father was a sales ...
has worked as a relationship manager for the Capital Group.
Investments
As of 2019, Capital Group held 5% of
BAE Systems
BAE Systems plc (BAE) is a British multinational arms, security, and aerospace company based in London, England. It is the largest defence contractor in Europe, and ranked the seventh-largest in the world based on applicable 2021 revenues ...
, 9% of
British American Tobacco, and 15.28% of
ASML Holding
ASML Holding N.V. (commonly shortened to ASML, originally standing for Advanced Semiconductor Materials Lithography) is a Dutch multinational corporation founded in 1984. ASML specializes in the development and manufacturing of photolithography ...
.
Leadership
The chairman and
chief executive
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
is Tim Armour, who took over in 2015 after the death of
James Rothenberg.
Strategies
Funds typically have between 3 and 13 managers; in addition to financial research, the managers may do on-the-ground due diligence, and in 2018 logged 12,400 to facilities such as
factories
A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. Th ...
. It has 3 independent divisions focused on equities: Capital World Investors, Capital Research Global Investors and Capital International Investors, as well as 1 focused on bonds, Capital Fixed Income Investors.
Funds
As of 2019, it had 36 funds. Growth Fund of America, founded in 1973, was the largest actively-managed fund as of 2020 with around $150 billion.
Ownership
As of 2019, the company is owned by 450 partners.
Offices
Capital Group employs more than 7,500 associates worldwide.
North American locations include
Atlanta
Atlanta ( ) is the capital and most populous city of the U.S. state of Georgia. It is the seat of Fulton County, the most populous county in Georgia, but its territory falls in both Fulton and DeKalb counties. With a population of 498,715 ...
, Los Angeles,
San Antonio,
Indianapolis
Indianapolis (), colloquially known as Indy, is the state capital and most populous city of the U.S. state of Indiana and the seat of Marion County. According to the U.S. Census Bureau, the consolidated population of Indianapolis and Marion ...
,
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* ...
,
San Francisco,
Toronto and
Washington, D.C.
)
, image_skyline =
, image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, Na ...
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
}
Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 2 ...
,
Hong Kong,
Mumbai,
Singapore and
Tokyo. Capital Group also has a growing presence in
Sydney.
[Smith, Mark (December 1, 2014). Capital Group expands retail sales team. ''Financial Standard'']
See also
*
List of mutual-fund families in the United States
References
External links
*
{{Authority control
Financial services companies established in 1931
Investment management companies of the United States
Companies based in Los Angeles
American companies established in 1931
1931 establishments in California
Privately held companies based in California