Capital Group names Mike Gitlin as new CEO

Capital Group has tapped Mike Gitlin, its head of fixed income, to become its next chief executive, as the world’s largest active asset manager continues expanding beyond its roots in US equity funds.

Gitlin, who joined Capital in 2014 from T Rowe Price, takes over the role from Tim Armour, who is retiring after 40 years at the privately run company, most recently serving as both chair and chief executive. At the same time, vice-chair Rob Lovelace, the last remaining member of Capital Group’s founding family to work at the firm, will step down from the management committee.

Los Angeles-based Capital is best known for an unusual investing philosophy that has attracted $2.2tn in assets under management. Its funds are run by multiple people, but instead of reaching agreement, each one is encouraged to stake out a different position, even if that means some portfolio managers are buying the same stock their colleagues are selling.

The group is also publicity shy, and shuns the idea of stars. Its board of directors has opted to divide the top jobs upon Armour’s retirement. Martin Romo, an equity portfolio manager with 31 years of experience at Capital, will become chair and assume a new chief investment officer role. The company said he would focus on “ensuring that The Capital System, Capital’s investment process, continues to operate at the highest level”.

Jody Jonsson, another veteran portfolio manager, will become vice-chair.

Founded in 1931, Capital’s staff has grown rapidly in recent years to 9,000 people as the group expanded in Europe and Asia and sought to woo customers with exchange traded funds and other new products. It also boosted its offerings of bond and “solutions” funds, which are popular for retirement and education savings.

Fixed-income assets have doubled since Gitlin’s arrival to $450bn, thanks to $108bn of net inflows over the past five years. That amounts to one-third of all flows into US active bond funds and makes Capital one of the largest active bond fund managers.

While the firm has been closely associated with the family of founder Jonathan Bell Lovelace, it is now owned by its 400 partners.

The change of leadership has been in the works for some time. “Throughout our over 90-year history, continuity and consistency have been a hallmark of how we manage assets for clients, and formal succession planning is critical to delivering superior, long-term investment results,” Armour said. “I am proud to see how well-positioned Capital is and am confident the next leadership group will continue to deliver on our mission”.

All three of the new appointees already belong to Capital’s 10-member management committee. They will assume their new roles in October. Lovelace intends to stay on as a portfolio manager, while Armour will retire at the end of the year.