The Capital Group Companies
Encyclopedia
The Capital Group Companies is one of the world’s largest investment management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...

 organizations with assets of around one trillion USD under management. It comprises a group of investment management companies, including Capital Research and Management, American Funds
American Funds
American Funds is a family of 33 mutual funds managed by Capital Research and Management, part of the Capital Group Companies. Capital Research and Management serves as the investment advisor to the 33 American Funds. The company does not advertise and shuns publicity, preferring to rely on...

, Capital Bank and Trust, Capital Guardian, and Capital International. As measured by assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...

, Capital rivals Fidelity Investments
Fidelity Investments
FMR LLC or Fidelity Investments is an American multinational financial services corporation one of the largest mutual fund and financial services groups in the world. It was founded in 1946 and serves North American investors. Fidelity Ventures is its venture capital arm...

, a figure the company will not confirm because it eschews publicity. The firm was founded in 1931 by Jonathan Bell Lovelace
Jonathan Bell Lovelace
Jonathan Bell Lovelace was the founder of The Capital Group Companies. He grew up in Brewton, Alabama and attended Auburn University. Lovelace spent most of the 1920s at a Detroit banking/brokerage firm, developing his investment research techniques and earning impressive results...

.

The Founding Years

Jonathan Bell Lovelace was raised in Southern Alabama by a family who was in the timber business. He initially studied to become an architect at what was then Alabama Polytechnic (Currently Auburn University
Auburn University
Auburn University is a public university located in Auburn, Alabama, United States. With more than 25,000 students and 1,200 faculty members, it is one of the largest universities in the state. Auburn was chartered on February 7, 1856, as the East Alabama Male College, a private liberal arts...

). After college, he enlisted in the military, working on a project that pioneered anti-aircraft artillery. Lovelace worked with E.E. MacCrone & Company, eventually becoming a partner. In 1929, Lovelace believed the stock market to be wildly overvalued and sold his stake in the company. In 1931, he founded an investment firm, Lovelace, Dennis & Renfrew, what would eventually become the Capital Group Companies. The early company was a model of efficiency, with communications between Los Angeles and New York being hugely expensive.

Overview

Capital Group is headquartered in Los Angeles, California
Los Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...

, and has over 7,500 associates in 21 office locations around the globe, including offices in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...

, Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...

, Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...

, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...

 and Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

. The company also has a large newly built campus in Irvine, California
Irvine, California
Irvine is a suburban incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28, 1971, the city has a population of 212,375 as of the 2010 census. However, the California...

, making it one of the largest employers in that city. Due to the recent decline in the markets and economy, the company has reduced its staff by over 1,500 from the previous high of 9,000 associates. Its families of mutual funds include "American Funds
American Funds
American Funds is a family of 33 mutual funds managed by Capital Research and Management, part of the Capital Group Companies. Capital Research and Management serves as the investment advisor to the 33 American Funds. The company does not advertise and shuns publicity, preferring to rely on...

" and "Capital International Funds." On the institutional side, Capital manages money for pensions, governments, and other entities worldwide. It also manages money for wealthy individuals and engages in private equity investments. One of its subsidiaries, Capital International, was responsible for the construction of the MSCI
Morgan Stanley Capital International
MSCI Inc. is a provider of investment decision support tools to investment institutions. Products include indices, portfolio risk and performance analytics - for use in managing equity, fixed income and multi-asset class portfolios - and governance tools....

 stock market indices
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....

. The Capital Group was voted as the third-most satisfactory workplace in the Greater Los Angeles area by the Los Angeles Business Journal
Los Angeles Business Journal
The Los Angeles Business Journal, established c. 1979, is a weekly newspaper in Los Angeles, California, which covers general business news. According to the journal's website, it has over 12,000 online subscribers, and a weekly print circulation of 30,000...

in 2006.

The American Funds
American Funds
American Funds is a family of 33 mutual funds managed by Capital Research and Management, part of the Capital Group Companies. Capital Research and Management serves as the investment advisor to the 33 American Funds. The company does not advertise and shuns publicity, preferring to rely on...

, managed by the Capital Group Companies was as of June 2007 the largest family of mutual funds in the US, followed by The Vanguard Group
The Vanguard Group
The Vanguard Group is an American investment management company based in Malvern, Pennsylvania, that manages approximately $1.6 trillion in assets. It offers mutual funds and other financial products and services to individual and institutional investors in the United States and abroad. Founder...

 and Fidelity Investments
Fidelity Investments
FMR LLC or Fidelity Investments is an American multinational financial services corporation one of the largest mutual fund and financial services groups in the world. It was founded in 1946 and serves North American investors. Fidelity Ventures is its venture capital arm...

, with roughly $1.3 trillion in assets under management .

In 2008, Capital Research and Management Company implemented the disaggregation of its equity investment operations to become known as Capital Research Global Investors and Capital World Investors.

A study published in September, 2009 in the scientific journal Physical Review E
Physical Review
Physical Review is an American scientific journal founded in 1893 by Edward Nichols. It publishes original research and scientific and literature reviews on all aspects of physics. It is published by the American Physical Society. The journal is in its third series, and is split in several...

 on the topic of new network analysis methodologies in economics concluded — in the course of presenting an example — that The Capital Group was the most powerful controlling shareholder in the global stock market, with major stakes in 36 of the 48 countries studied.

Capital Group is organized into tiers of subsidiaries, one of which is the wholly owned Capital Guardian Trust Company, which in turn manages the division, Personal Investment Management, founded in 1974 to manage the assets of employees and retirees of The Capital Group Companies.

Executives

David I. Fisher – chairman of the board of Capital Group International, Inc. and Capital Guardian Trust Company [6]
Shaw B. Wagener – chairman of Capital International, Inc.[7]
James Rothenberg – chairman of Capital Research & Management Co.[8]

Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

 

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External links

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