Low-Key $3T Investment Firm Is Ready for Its Closeup

LA-based Capital Group manages $3.3 trillion in assets, but the nearly century-old firm has managed to stay out of the spotlight. Not anymore. On Wednesday, Capital Group and investment firm KKR announced two new funds for retail investors, and Bloomberg reports that there are plans to expand the partnership further next year. 

The new funds blend private and public assets as investors increasingly move money into private markets. 

Chasing New Money

Capital Group is giving itself a makeover this year, and making sure a new demo of retail investors know about it. In addition to its team-up with KKR, the firm is also expanding its ETF offerings. Capital Group has a marketing campaign planned and, in the meantime, has been announcing its new phase in quirky ways, like putting its logo on a hot air balloon and getting finance execs to play pickleball. 

The change-up after a century of success could be a sign of changing times:

• Capital Group’s clients have been withdrawing more money from its equity mutual funds and similar offerings than they’ve been investing annually for the past decade. From 2015 through this September, investors took $122 billion out of Capital Group’s largest mutual fund, the Growth Fund of America, Morningstar found. The fund, which dates to 1973, is the biggest actively managed mutual fund in the US.  
• As investors turn away from mutual funds, they’ve been piling into private markets. Deloitte predicts retail investors could pour $2.4 trillion into private capital by 2030, up from $80 billion estimated today. Competitors including Apollo Global Management and Blackstone have ramped up offerings for retail investors, putting pressure on firms like Capital Group to keep up. Following POTUS Trump’s order this fall to let retirement plans invest in private equity, companies like Empower have added private assets to 401(k) plans. 

New Century, New Me: Capital Group is undergoing a significant shift under its CEO, Mike Gitlin, who took the position in 2023. And the strategy is showing early signs of success: Two funds started as part of the tie-up with KKR have more than $500 million in assets already. While Capital Group wants to fit in with the new gen of firms (Gitlin’s been appearing on podcasts, if that’s any indication), leveraging its legacy could be key: About three-quarters of US financial advisors have Capital Group products in their portfolios.