Exclusive: Capital Group shakes up strategy to hit $4 trillion by 2031

LONDON, June 12 (Reuters) - Capital Group aims to grow its fixed income business, accelerate overseas expansion and diversify away from its core equities franchise to stem client withdrawals and compete with faster-growing fund rivals, its CEO Mike Gitlin told Reuters.

Over its 93 years, Los Angeles-based Capital has built the world's largest active fund firm, including the giant 'American Funds' range. It now manages assets totalling $2.6 trillion, but seldom publicly shares insight into its investing.

Capital expects to grow assets by more than half over the next seven years to around $4 trillion, Gitlin said.

Decisions by privately-owned Capital, whose scale makes it a top ten shareholder in companies including Microsoft, Meta Platforms and General Electric, can move markets and sometimes hold considerable sway over corporate strategies.

Gitlin unveiled Capital's priorities to 9,000 staff from its new international hub in west London on Tuesday, as a boom in passive and private investing forces a change of tack.

Assets in passive funds topped those in active ones for the first time in the U.S. last year, Morningstar data shows, and Capital has endured five straight years of net outflows from its U.S. equity funds, while the U.S. business as a whole has seen more than $100 billion withdrawn across 2022 and 2023.

And while major rivals including JP Morgan (JPM.N)New Tab, opens new tab and BlackRock (BLK.N)New Tab, opens new tab reported big inflows last year, Capital struggled.

Gitlin's $4 trillion aim implies a slower growth rate than Capital achieved the prior seven years, when it expanded from $1.5 trillion as outflows left it depen...
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