Capital Group is an American

investment management Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as r ...

company. It ranks among the world's oldest and largest

organizations, with over $2.6 trillion in

assets under management In finance, assets under management (AUM), sometimes called fund under management, refers to the total market value of all financial assets that a financial institution—such as a mutual fund, venture capital firm, or depository institutio ...

. Founded in

Los Angeles Los Angeles, often referred to by its initials L.A., is the List of municipalities in California, most populous city in the U.S. state of California, and the commercial, Financial District, Los Angeles, financial, and Culture of Los Angeles, ...

California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...

in 1931, it is privately held and has offices around the globe in the

Americas The Americas, sometimes collectively called America, are a landmass comprising the totality of North America and South America.''Webster's New World College Dictionary'', 2010 by Wiley Publishing, Inc., Cleveland, Ohio. When viewed as a sing ...

Asia Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

and

Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...

. Capital offers a range of products focused on active management, including more than 40 mutual funds through its

subsidiary A subsidiary, subsidiary company, or daughter company is a company (law), company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidia ...

, American Funds Distributors, as well as separately managed accounts (or collective investment trusts),

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

, investment services for high net worth

investor An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital the investor usually purchases some species of pr ...

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 Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

brokerage firm A broker is a person or entity that arranges transactions between a Purchasing, buyer and a sales, seller. This may be done for a commission (remuneration), commission when the deal is executed. A broker who also acts as a seller or as a buyer b ...

''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. 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 fund A mutual fund is an investment fund that pools money from many investors to purchase Security (finance), securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in ...

s 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 over a section of the portfolio. Known today as The Capital System, it avoids the

phenomenon A phenomenon ( phenomena), sometimes spelled phaenomenon, is an observable Event (philosophy), event. The term came into its modern Philosophy, philosophical usage through Immanuel Kant, who contrasted it with the noumenon, which ''cannot'' be ...

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. Philip May, husband of former British PM Theresa May, has worked as a relationship manager for the Capital Group.

Investments

As of 2019, Capital Group held 5% of

BAE Systems BAE Systems plc is a British Multinational corporation, multinational Aerospace industry, aerospace, military technology, military and information security company, based in London. It is the largest manufacturer in Britain as of 2017. It is ...

, 9% of

British American Tobacco British American Tobacco p.l.c. (BAT) is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products including electronic cigarettes. The company, established in 1902, is headquartered in London, E ...

, and 15.28% of ASML Holding.

Leadership

The

chief executive A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

i
Mike Gitlin
as of 2024.

Strategies

Funds typically have between three and 13 managers, each managing a portion of the portfolio independently to reduce key person risk and provide diversity of thought. In addition to financial research, the managers may do on-the-ground due diligence, and in 2018 logged 12,400 visits to facilities such as

factories A factory, manufacturing plant or 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 three independent divisions focused on equities: Capital World Investors, Capital Research Global Investors and Capital International Investors, as well as one focused on bonds, Capital Fixed Income Investors.

Funds

As of 2019, Capital Group had 36

s, which operate under their American Funds banner and had about US$1.9 trillion under management. Growth Fund of America, founded in 1973, was the largest actively-managed fund as of 2020 with around $150 billion. In 2022, Capital Group introduced a suite of six exchange traded funds, five focused on equities and one focused on bonds and other fixed income.

Ownership

As of 2019, the company is owned by 450 partners.

Offices

Capital Group employs more than 7,500 associates worldwide.

North America North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...

n locations include

Atlanta Atlanta ( ) is the List of capitals in the United States, capital and List of municipalities in Georgia (U.S. state), most populous city in the U.S. state of Georgia (U.S. state), Georgia. It is the county seat, seat of Fulton County, Georg ...

, Los Angeles,

San Antonio San Antonio ( ; Spanish for " Saint Anthony") is a city in the U.S. state of Texas and the most populous city in Greater San Antonio. San Antonio is the third-largest metropolitan area in Texas and the 24th-largest metropolitan area in the ...

Indianapolis Indianapolis ( ), colloquially known as Indy, is the List of capitals in the United States, capital and List of municipalities in Indiana, most populous city of the U.S. state of Indiana and the county seat of Marion County, Indiana, Marion ...

, New York,

San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...

Toronto Toronto ( , locally pronounced or ) is the List of the largest municipalities in Canada by population, most populous city in Canada. It is the capital city of the Provinces and territories of Canada, Canadian province of Ontario. With a p ...

and Washington, D.C. As part of expansion plans in Europe, Capital Group established a presence in

Frankfurt Frankfurt am Main () is the most populous city in the States of Germany, German state of Hesse. Its 773,068 inhabitants as of 2022 make it the List of cities in Germany by population, fifth-most populous city in Germany. Located in the forela ...

Madrid Madrid ( ; ) is the capital and List of largest cities in Spain, most populous municipality of Spain. It has almost 3.5 million inhabitants and a Madrid metropolitan area, metropolitan area population of approximately 7 million. It i ...

Milan Milan ( , , ; ) is a city in northern Italy, regional capital of Lombardy, the largest city in Italy by urban area and the List of cities in Italy, second-most-populous city proper in Italy after Rome. The city proper has a population of nea ...

and

Zurich Zurich (; ) is the list of cities in Switzerland, largest city in Switzerland and the capital of the canton of Zurich. It is in north-central Switzerland, at the northwestern tip of Lake Zurich. , the municipality had 448,664 inhabitants. The ...

, adding to its offices in

Geneva Geneva ( , ; ) ; ; . is the List of cities in Switzerland, second-most populous city in Switzerland and the most populous in French-speaking Romandy. Situated in the southwest of the country, where the Rhône exits Lake Geneva, it is the ca ...

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

and

Luxembourg Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France on the south. Its capital and most populous city, Luxembour ...

. Its Asia offices include

Beijing Beijing, Chinese postal romanization, previously romanized as Peking, is the capital city of China. With more than 22 million residents, it is the world's List of national capitals by population, most populous national capital city as well as ...

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

Mumbai Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian state of Maharashtra. Mumbai is the financial capital and the most populous city proper of India with an estimated population of 12 ...

Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...

and

Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...

. Capital Group also has a growing presence in

Sydney Sydney is the capital city of the States and territories of Australia, state of New South Wales and the List of cities in Australia by population, most populous city in Australia. Located on Australia's east coast, the metropolis surrounds Syd ...

.Smith, Mark (December 1, 2014). Capital Group expands retail sales team. ''Financial Standard''

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 Asset management companies