Jon B. Lovelace, a pioneer in the mutual fund industry who guided The Capital Group Companies into one of the largest money-management firms in the nation, died Wednesday at his Montecito home after a long illness. He was 84.
Lovelace, chairman emeritus and former portfolio counselor of Capital Research & Management Co. and former chairman of The Capital Group, was an early proponent of international investing and one of the principal architects of the multiple portfolio system of asset management. The Capital Group had been started by Lovelace’s father, Jonathan Bell Lovelace, and the son joined the firm in 1951. Today, under the American Funds brand, it manages more than $1.2 trillion in 33 funds owned by millions of Americans.
“For many of us, Jon Lovelace represents Capital,” James Rothenberg, nonexecutive chairman of The Capital Group who worked with Lovelace for almost 40 years, said in a statement released by the company.
“His legacy is an organization of incredibly talented people, great integrity, a unique approach to the investment challenge, and a culture that is broadly admired. He touched so many lives in so many positive ways.”
In the 1950s, Lovelace helped initiate the multiple portfolio counselor system in which the assets of each fund are divided among multiple investment professionals who invest according to their strongest conviction. The managers are then compensated by the returns they generate for investors and clients as well as how well the fund does. The system, which blended individual responsibility and collaboration, was a radical departure from the single-manager system and is increasingly emulated in the mutual fund industry.
Throughout his tenure, Lovelace helped The Capital Group resist trendy investment ideas such as Internet funds that blossomed in the late 1990s and eventually hurt investors. Instead, he emphasized a buy-and-hold philosophy and helped establish practices that reinforced his beliefs. Under his guidance, the firm adjusted its compensation for investment professionals, putting emphasis on longer rolling periods instead of the single-year results that are common in the industry.
“Jon Lovelace was not only a pioneer who helped make mutual funds a household word, but also epitomized the high integrity that serves as a role model for the entire financial services industry,” Mitchell Kauffman, a certified financial planner with Kauffman Wealth Services in Santa Barbara, told Noozhawk.
“We could benefit from having many more like him, and he will be sorely missed.”
Lovelace was born in Detroit in 1927 and moved with his family to Los Angeles two years later. He attended Beverly Hills High School and the Hotchkiss School in Lakeville, Conn., then left to join the Navy during World War II. After the war, he attended Princeton University and graduated cum laude with a degree in economics. He and the former Lillian Pierson were married in 1950 and they have four grown children and six grandchildren.
Although he shunned publicity, Lovelace was a leading philanthropist who gave time, effort and money to support the arts, education, health, science and the environment. He was chairman of the J. Paul Getty Trust from 1988 to 1993, during the period that the new Getty Center was being built in Los Angeles.
Lovelace helped fund the Ahmanson-Lovelace Brain Mapping Center at UCLA and, in a departure from his desire to donate anonymously, it was one of the few times in which he allowed an institution to use his name.
Locally, Lovelace was an honorary trustee of Sansum Clinic and the Lovelaces have been supporters of Antioch University Santa Barbara, the Santa Barbara Contemporary Arts Forum, the Santa Barbara Council on Alcoholism & Drug Abuse, the Santa Barbara Museum of Art, Speaking of Stories and UCSB Foundation.
Lovelace is survived by his wife, Lillian; their daughter, Carey Lovelace; three sons, Jeffrey, Jim and Rob; and six grandchildren.
Funeral services are pending. In lieu of flowers, the family requests that donations be made to the Sansum Clinic Philanthropy Department, P.O. Box 1200, Santa Barbara 93102, or “pray for the Dodgers.”