Capital Group

“We want to be specialized in sectors, but we also want to remember what the ultimate job is here. It's to pick stocks. It's not to become an expert in that particular field.”

“Capital Group actually approached us, and they had Their own business strategy around deciding to want to partner with an alternative manager, and it was just such a perfect fit. They have this really strong business, especially in the independent broker-deale…”

“There are really six managers that dominate the market, probably have 85 plus percent of the assets. That's Vanguard, Fidelity, BlackRock, State Street, T. Rowe, and Capital Group.”

“The only reason you wouldn't end up at partnership is if you wanted to retain a hundred percent of the economics.”

“So they come and say, the average retirement age of a portfolio manager at Capital Group is in their sixties. It's not in their forties or fifties.”

“Everyone sees what everyone's doing, and the analysts manage money. They're not credit raters. They're not stock raters. They actually manage real client assets, which is different.”

“There's about a hundred investment professionals in each of those three equity units. There is a Chinese wall. They can't see what the others are doing. It is formal disaggregation, but they also have an environment where they can sit around an actual table an…”

“There are some that will launch a multitude of strategies, and if it works great, and if not, they'll close them. That's a lot of trial and error on somebody's life savings. We don't want to do that.”

“It can take six to 12 months of the interview process to join Capital.”

“What they have found, almost bar none in recent years, Is dealing with a multitude of asset management companies can be too noisy and hasn't necessarily generated better outcomes. So they are shrinking the number of partners they use. And when I say they, weal…”

“If you look at our equity strategies since inception, over 80% of them have beaten the market after fees.”

“If you become a shareholder of Capital Group, you hold it for your entire career, and upon retirement, over two, four, and six years, you then sell it back to the company, and we sell it on to the next shareholder.”

“It's the reason why we'll have 3.2 trillion in a certain number of strategies that in all likelihood is less than all of our major competitors because that hurdle is so high.”

“When JBL founded the company, he said in 1931, when my grandkids, who didn't exist at the time, when my grandkids pass away, no one in the Lovelace family should own any bit of Capital Group stock.”

“And he's measured on his eight-year result first and foremost in his quantitative bonus, not his one-year result.”

“The number of committees that report to both of those oversight groups is Is down 50% in the last handful of years.”

“If our investment results are the same and our tenure at Capital Group's the same, our bonus is the same. Meaning we don't incentivize a money grab to manage as many assets as you can.”

“Part of the secret of the Capital's success is he kept the entity a hundred percent owned by himself until it was profitable. He didn't want anyone else to share in any of the losses that would come in any calendar year. Only after in the fifties Capital Group…”

“Building it ourselves, we have 3.2 trillion of client assets and 400 investment professionals focused on that and them.”

“Instead of saying, be productive tomorrow morning when you join and manage money, we say, take three to six months. Look at this specific industry. Get to know all the managements of this industry. Look at the history of the coverage of it from everyone who ha…”

“In the investment group, it's even lower. It's low single digit attrition in the investment group.”

“What we have found in the last 20 years is somewhere between 80 and a hundred is the right number, and it's about the investment dialogue.”

“The average attrition rate in asset management's, 13 or 14%. Ours is half of that. This is across the entire 9400 person entity of capital group.”

“If someone's not able to generate differentiated investment outcomes, they won't survive a capital group forever, but we give them five plus years. It's not as if we try to make that determination after one or two years, or having a great success in a short pe…”

“Last year, they did 21,000 company meetings. 21,000.”

“Don Valentine had worked at Capital Group before founding Sequoia, and it was determined at the time that it was best housed outside of the four walls of Capital Group to keep the focus on active public management.”

“We've also digitized all 94 years of our written physical library. Now, if someone wrote a report on ExxonMobil in 1957, it would be in the system.”