It is one of the largest and most innovative asset managers in the world and has been active in Switzerland for almost six decades. Yet hardly anyone in this country has heard of it.
Capital Group has been around for 90 years. Its presence in Switzerland goes back almost 60 years. However, it is hardly known in this country. This is all the more surprising since the U.S. American asset manager with its 8,000 employees, manages no less than $2,600 billion in client assets worldwide.
The company is one of the five largest active investors in fixed-income investments globally. In 1965 Capital Group developed the MSCI reference indices and is one of the pioneers in the field of emerging markets.
Los Angeles not New York
Marco Büchler (pictured above) points out in his first interview with «finews.ch» since joining Capital Group as head of financial intermediaries (wholesale business) in October 2019, that the company is domiciled in Los Angeles. This alone gives the group a different culture and sets it apart from the bulk of U.S. high finance, which is in New York, he says.
Capital Group's partner structure allows for more long-term corporate strategy and planning as well as leading to greater company loyalty among managers, he says. Some employees have been with the company for more than 20 years.
Performance
Ultimately however, it’s the performance of the various funds and mandates that accounts for Capital Group's success. In addition to its long-term goals and focus on sustainable returns, the group distinguishes itself from other asset managers through its investment approach – its so-called capital system.
According to this approach the approximately 220 analysts are not only responsible for research, but also act as investors. Several portfolio managers and analysts are in charge of an investment vehicle as a whole, while each one takes responsibility for a part of the portfolio. This allows experts to bring in their individual assessments, which are then combined. In other words, different investment perspectives come together to form an investment strategy and not one portfolio manager ascends to «star manager,» Büchler says.
Special Status
Capital Group employs around 400 investment experts worldwide (seven are in Switzerland). Switzerland has a special status within Capital Group.
The company opened its first European branch - back in 1962 - in Geneva. Now it employs around 140 people in the country, just under ten of which are in Zurich. Another Zurich hire will follow this month. The group is invested in several Swiss companies, such as Sika, Emmi and Nestlé via its funds.
Early Investment Opportunities
The company has succeeded in participating in early finance rounds of some «mega-companies,» including those of Microsoft, Alphabet (Google) and Tesla.
Capital Group typically holds its investments for a relatively long time. In certain funds up to 60 percent of the investments are held for more than five years, around 34 percent of those for more than eight years. Here too, the long-term approach underpins the asset manager's success, helping it achieve continuous returns.
Sustainability
The asset manager also pursues a strict sustainability approach, which is based partly on the U.N.'s global compact ESG criteria as well as other measures. Some of the largest holdings which are on the company's list of companies which are under review in relation to sustainability, are Alphabet (Google), Vale, América Movil, Gazprom and Gerdau, Büchler says.
