Capital Group Aims To Double Assets To $4 Trillion By 2031: Mike Gitlin Says 'Europe And Asia Are Absolutely Critical To Our Future'

Capital Group is looking to expand its fixed-income business, accelerate its international presence, and diversify its core equities franchise. This initiative is aimed at counteracting client withdrawals and competing with faster-growing fund rivals.

What Happened: The Los Angeles-based firm, which has been privately owned for 93 years, is a major player in the active fund industry, managing assets worth $2.6 trillion, Reuters reported. The company’s CEO, Mike Gitlin, shared the new strategy with 9,000 staff members at the firm’s international hub in London.

Capital Group aims to grow its assets by more than half over the next seven years, reaching approximately $4 trillion. This growth strategy includes expanding its fixed-income business, which has seen a nearly 40% increase in assets over the last four years, reaching $507 billion.

Gitlin, who took over as CEO in October, is also focusing on expanding the firm’s international presence, with a new office in Miami targeting offshore clients in Latin America. “Europe and Asia are absolutely critical to our future,” he said, aiming to shift the current 80:20 split between equity and bond assets to as far as 70:30 by 2031.

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Investors can Invest in Capital Group Fixed Income ETF Trust Capital Group U.S. Multi-Sector Income ETF CGMS through any online brokerage.

Why It Matters: Capital Group’s move to revamp its strategy comes at a time when the industry is experiencing significant changes. The firm has faced five consecutive years of net outflows from its U.S. equity funds, while the U.S. business as a whole has seen over $100 billion withdrawn across 2022 and 2023.

Despite its formidable reputation for long-term investing, Capital Group has been slow to adapt to the changing market. The company’s decision to enter new terrain, offering passive or private funds through partnerships with other fund firms, is a significant shift in its approach.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote