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Capital Group: A Long Running Investment Organization

October 25, 2012

Not everyone got burned in the stock market crash of 1929. One person who saw the crash coming was Jonathan Bell Lovelace (JBL to co-workers). During the good times of the 1920’s he worked at E.E. MacCrone & Company an investment banking/brokerage firm based in Detroit. JBL determined that there was something wrong with stock market prices and the underlying values of the companies.

Unable to convince his associates at MacCrone he sold his 10% interest in the firm in the late summer of 1929, took most of his investment out of the market and avoided the big crash that followed. He also left Detroit and settled in California.

In 1931 JBL founded Capital and the following year The Investment Company of America (ICA) a closed-end investment trust asked JBL to reorganize the trust.  JBL did so and Capital began managing the trust. Shareholders approved a change to an open-end mutual fund. ICA subsequently became one of the largest and most successful mutual funds in the world. It is also the flagship of the American Funds.

From this initial success Capital Group now has 7,000 associates with 23 offices around the world and 80 solid years of investment management experience.  The Capital Group Companies manage the investments of individuals and large institutions via separately managed accounts, pooled investments and mutual funds.

The Capital Group Companies include Capital International, Capital Guardian, Capital Research and Management, Capital Bank and Trust, and American Funds. As a privately held institution it does not divulge financial information as openly as other companies.

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