Strong faith by investors in mutual funds helped Capital Research & Management Co. top this year’s List of Los Angeles County’s largest money management firms.
The firm which specializes in mutual funds and annuity products manages a portfolio with $190.8 billion in assets. That’s up by more than $40 billion in just two years.
To put the size of Capital Research’s portfolio into perspective, the largest Los Angeles County-based bank, Sanwa Bank California, has assets of about $7.8 billion.
Things haven’t always been this way. In 1988, First Interstate Bank then the county’s largest bank had assets of $58.1 billion and Capital Research had assets of $20.1 billion.
“Basically, the industry as a whole has grown a great deal in recent years as the attraction of the stock market has grown,” said John Lawrence, a spokesman for Capital Research. “We’ve been around for more than 60 years, and enjoy a reputation for being careful long-term investors.”
The second-largest money manager on the List this year is Capital Guardian Trust Co., with $56.7 billion in assets. The firm is affiliated with Capital Research, and handles institutional accounts.
In 1987, Capital Guardian Trust was a larger manager than mutual fund shop Capital Research, but since then the flood of individual investors into mutual funds has sent Capital Research’s assets soaring.
Capital Guardian Trust was ranked third on the List two years ago, the last time this List was published, with $48.4 billion in assets. But this year, it trades places with TCW Group Inc., with $52.6 billion in assets.
Third-ranked TCW has been troubled during the past few years by defections of top-ranking fund managers. Among the List’s top 10, TCW is the only one to report a dip in assets down from $53.7 billion two years ago.
Representatives from the company would not comment.
Transamerica Investment Services Inc. came in fourth on the List, with $33.4 billion in assets. The firm handles mutual funds, annuities and life insurance.
New to this year’s List is Pasadena-based First Quadrant Corp., with $16.5 billion in assets.
One bit of news that might shape next year’s List is that No. 17-ranked Roger Engemann & Associates has agreed to be acquired by Phoenix Duff & Phelps, in a deal announced just last week.
The $180 million cash purchase, which involves an additional $50 million payment if Engemann meets certain financial goals within the next five years, will add Engemann’s $5.5 billion in assets under management to Phoenix Duff & Phelps’ $33 billion.
Engemann’s main activity is managing individual investment accounts and the Pasadena Group of Mutual Funds.
If the acquisition is consummated, Phoenix Duff & Phelps will not move Engemann’s headquarters from Pasadena or change its name, although the name of the Pasadena Funds will likely be changed to the Phoenix-Engemann Funds.
