 | |
 Headquarters atBank of America Plaza | |
| Company type | Private |
|---|---|
| Industry | Investment management |
| Founded | 1931; 94 years ago (1931) |
| Founder | Jonathan Bell Lovelace |
| Headquarters | , |
Area served | Worldwide |
Key people | Richard Cisneros(CEO) |
| Products | |
| Revenue |  $7.6 billion (2020)[1] |
| AUM | $2.2trillion (August 2021)[2] |
| Owner | Partners |
Number of employees | 7,500 (2020)[3] |
| Subsidiaries | American Funds, Capital Research and Management Company, Capital Bank and Trust Company, FSB |
| Website | capitalgroup |
Capital Group is an Americaninvestment management company. It ranks among the world's oldest and largestinvestment management organizations, with over $2.6 trillion inassets under management. Founded inLos Angeles,California in 1931, it is privately held and has offices around the globe in theAmericas,Asia,Australia andEurope.
Capital offers a range of products focused onactive management, including more than 40 mutual funds through itssubsidiary, American Funds Distributors, as well as separately managed accounts (or collectiveinvestment trusts),private equity, investment services for highnet worthinvestors in the U.S., and a range of other offerings for institutional clients and individual investors globally.[4][5][6]
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 thestockbrokerage firmE.E. MacCrone, where he explored the concept of developing anopen-end mutual fund. He eventually sold his stake in that company, just before theWall Street Crash of 1929.[7][8][9]
In 1933, Lovelace's firm took over management ofThe Investment Company of America, which he had launched at E.E. MacCrone in 1927.[10] For the next 20 years, his firm enjoyed modest success.[11] Asmutual funds gained in popularity in the 1950s, Capital's roster of mutual funds grew.[12]
The International Resources Fund, established in 1954,[13] 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.[14]
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 totaldiscretion over a section of the portfolio. Known today as The Capital System, it avoids thephenomenon of creating single-manager "stars," who can impact a fund's results should they leave.[15] In the mid-1960s, Capital began to includeresearch analysts in the management of the portfolios, reserving a portion of each to allow analysts to pursue their highest conviction investment ideas.[16]
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 thebandwagon.[17]
Philip May, husband of former British PMTheresa May, has worked as a relationship manager for the Capital Group.[18]
As of 2019, Capital Group held 5% ofBAE Systems,[19] 9% ofBritish American Tobacco,[20] and 15.28% ofASML Holding.[21]
Thechief executive isMike Gitlin as of 2024.
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-grounddue diligence, and in 2018 logged 12,400 visits to facilities such asfactories.[22] 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.[23][24]
As of 2019, Capital Group had 36mutual funds, which operate under their American Funds banner and had about US$1.9 trillion under management.[25] Growth Fund of America, founded in 1973, was the largest actively-managed fund as of 2020 with around $150 billion.[26]
In 2022, Capital Group introduced a suite of sixexchange traded funds, five focused on equities and one focused on bonds and other fixed income.[27]
As of 2019, the company is owned by 450 partners.[28]
Capital Group employs more than 7,500 associates worldwide.North American locations includeAtlanta, Los Angeles,San Antonio,Indianapolis,New York,San Francisco,Toronto andWashington, D.C. As part of expansion plans in Europe, Capital Group established a presence inFrankfurt,Madrid,Milan andZurich, adding to its offices inGeneva,London andLuxembourg.[29] Its Asia offices includeBeijing,Hong Kong,Mumbai,Singapore andTokyo. Capital Group also has a growing presence inSydney.[30]
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