Capital Group

Office address: 53rd Floor, 333 South Hope Street, Los Angeles, CA 90071
Website: www.capitalgroup.com
Year established: 1931
Company type: financial sevices
Employees: 9,000+
Expertise: sub-advisory services to mutual funds, equity, fixed income, multi-asset solutions, ESG, retirement planning, global markets, investment research, wealth management, active management, financial planning, investment management
Parent company: N/A
Key people: Mike Gitlin (CEO), Noriko Chen (portfolio manager), Canise Arredondo (CFO), Rob Klausner (COO), Matt O'Connor (head of NACG), Martin Romo (CIO), Jody Jonsson (vice chair)
Financing status: N/A

Capital Group, based in Los Angeles, is a global investment firm managing over $2.7 trillion in assets as of June 2024. With more than 9,000 employees in 32 offices worldwide, they focus on delivering strong, long-term results for investors through research-driven strategies. For over 93 years, they have helped individuals and institutions grow their financial futures.

History of Capital Group

Capital Group was founded in 1931 by Jonathan Bell Lovelace in Los Angeles during the Great Depression to help investors navigate challenging economic times. In 1943, the firm opened a New York office but moved their headquarters back to Los Angeles a year later. The firm introduced The Capital System in 1958, a unique approach to portfolio management.

By 1962, Capital Group expanded internationally, opening its first office outside the US in Geneva, followed by offices in London, Tokyo, Hong Kong, and Singapore. In 1983, they launched a dedicated service center for American Funds shareholders in California.

The company celebrated its 90th anniversary in 2021 and entered the ETF market in 2022 with its first actively managed funds.

Products and Services of Capital Group

Capital Group offers a broad range of investment solutions tailored to various client needs:

• mutual funds: over 40 options through its American Funds subsidiary
• separately managed accounts: collective investment trusts for institutional investors
• private equity: opportunities to invest in private companies
• wealth management: services designed for high-net-worth individuals
• institutional investment services: tailored solutions for institutional clients
• retirement plans: including 401(k) plans and retirement-focused products
• financial planning and advice: comprehensive guidance for financial decision-making

Capital Group's services are structured around three independent investment groups, each making its own equity and proxy voting decisions. Their fixed income professionals manage research and investments across the organization, ensuring comprehensive coverage in both equity and fixed income sectors.

Culture at Capital Group

Capital Group promotes a collaborative work environment where diverse perspectives are valued and supported. They are committed to equal opportunity employment and offer competitive compensation and benefits that prioritize employee well-being. Their focus on a positive work-life balance is reflected in a variety of programs, including:

• financial wellness: competitive salaries, annual bonuses, retirement contributions, and 401(k) plans
• physical wellness: comprehensive health benefits to support employees' physical well-being
• mental wellness: resources for emotional support and mental health care
• social wellness: programs and activities that encourage social connections
• flexibility: hybrid work schedules, a casual dress code, and remote work options
• career development: mentoring, leadership programs, and diversity and inclusion initiatives

The organization values diversity as a cornerstone of its business, actively seeking different perspectives and experiences to build inclusive teams. The company is committed to fostering a workplace where every voice is heard, believing that inclusion leads to better outcomes. This focus on belonging drives their diversity, equity, and inclusion efforts, which include:

• representation goals: increasing women, Black/African American, and underrepresented minorities in leadership roles by 2025
• upskilling and mentoring: providing coaching, mentoring, and personalized development plans for associates
• capital communities: fostering inclusion through internal support networks
• listening at moments that matter: ensuring strong onboarding and continuous feedback

Capital Group integrates environmental, social, and governance (ESG) issues into its investment process through a three-part approach: research frameworks, monitoring, and engagement. They have developed over 25 sector-specific frameworks and use over 50 data sources to identify ESG risks.

Long-standing relationships with company management allow for ongoing dialogue about managing ESG risks and opportunities, supporting efforts to address key issues, including:

• engagement: over 1,100 ESG-related engagements across more than 650 companies in 2023
• investor-led: investment professionals collaborate with the stewardship team to deliver consistent messages
• transparency: ESG goals and outcomes are tracked and documented
• proxy voting: investment professionals decide proxy outcomes after thorough analysis

In terms of sustainability, Capital Group invests in people, communities, and the environment through its business practices. Their efforts include expanding renewable energy, improving supplier relationships, and adhering to climate-related financial disclosures. They aim to empower employees to support meaningful causes and work toward greater access to financial services for all.

About Capital Group CEO Mike Gitlin and Key People

Mike Gitlin serves as the company CEO and president, overseeing investment strategies for clients worldwide. He previously held leadership roles at T. Rowe Price, Citi, and Credit Suisse Asset Management. Gitlin earned his bachelor’s degree from Colgate University and started his career as a trader at George Weiss & Associates.

The following are key leaders at Capital Group, each playing vital role in the company’s operations:

• Noriko Chen, as a portfolio manager, manages investment strategies and oversees equity research
• Canise Arredondo, serving as CFO, directs financial operations, reporting, and budgeting
• Rob Klausner, as COO, leads daily operations and coordinates business strategies
• Matt O'Connor, head of NACG and CEO of Capital Client Group, supervises client relations and business development
• Martin Romo, as chair and chief investment officer, guides overall investment strategy and policy
• Jody Jonsson, serving as vice chair of Capital Group, contributes to corporate strategy and investment decisions

The Future at Capital Group

Capital Group recently introduced the Target Date Retirement Blend Series, combining their active management with passive strategies from BlackRock and State Street. This new series offers a diversified solution for retirement planning, appealing to a broader range of plan sponsors. By blending active and passive strategies, it aims to meet various preferences, from cost-conscious options to those seeking higher returns.

Capital Group recently partnered with Orion, offering new opportunities for financial advisors through this collaboration. These portfolios, available through Orion’s platforms, are designed to help advisors meet client goals with dynamic asset allocation. This collaboration reflects Capital Group’s commitment to offering innovative, actively managed investment solutions while expanding its presence in the growing ETF market.