Los Angeles Capital is a global equity firm engaged in managing assets for leading institutions around the world. The firm is recognized as a pioneer in dynamic equity management, utilizing proprietary technology to engineer equity portfolios that adapt to today’s equity market. The firm’s senior investment professionals bring together three decades of investment experience to develop models for measuring and forecasting return and risk of global equity securities. The firm manages $29.9 billion as of December 31, 2017 in assets amongst a wide variety of public equity strategies designed to meet institutional client return and risk objectives. Los Angeles Capital is 100% employee owned. The firm's wholly-owned subsidiary, LACM Global, Ltd., is located in London.
Watch Tom Stevens discuss the History and Future of Los Angeles Capital.
An independent, global equity management firm engineering portfolios that dynamically adapt to today’s economic environment resulting in superior investment performance.
Los Angeles Capital values:
- Integrity, transparency and clear communication to enhance trust in our firm, people and process.
- A team orientation that provides great strength and shared success. All members contribute and challenge one another to improve results and are united in one investment philosophy, process and culture.
- The firm’s professionals who excel at research and possess deep intellectual curiosity.
- The dynamic nature of our models in order to remain competitive.
Los Angeles Capital believes that:
- Independent ownership by employees provides organizational stability and long term alignment of interest with institutional clients.
- Capital markets are dynamic in nature, requiring forward-looking adaptive processes for security selection, risk management, portfolio construction, and trading.
- Cutting edge risk management technology, combined with an experienced investment team, minimizes the probability of unexpected outcomes.
- Achieving client objectives is a sound strategy for business growth.
Los Angeles Capital is dedicated to promoting a diverse corporate culture in which different backgrounds and perspectives are not only represented, but celebrated. We strive to create a workplace that is comfortable for all employees regardless of age, gender, race, religion, sexual orientation, nationality, or ethnicity, and in so doing, cultivate an environment based upon mutual respect and inclusion. By fostering a culture in which employees feel empowered to leverage their individual talents and share their varied viewpoints, we as a firm grow stronger and more innovative.
Los Angeles Capital prides itself on its people. We have built a team of driven, energetic, and passionate individuals, many of whom are actively involved in the Los Angeles community. Members of the Firm have donated or given generously of their time and talent to the following organizations:
Special Olympics of Southern California
Women in Institutional Investments Network (WIIIN)
ICEF Vista Academy (College and Career Days)
American Red Cross
Additionally, as a firm, we are evaluating ways to be greener and to promote more sustainable practices such as recycling and energy conservation. Our headquarters is located in a building that is LEED certified by the U.S. Green Building Council.
Los Angeles Capital manages $29.9 billion in assets for institutional investors around the world. Clients include large pension funds (corporate & public), endowments, foundations and trusts. Each client portfolio is customized for specific guidelines, benchmarks and risk tolerances with portfolio sizes ranging from $25 million to over $4 billion. The firm also provides sub-advisory services to leading financial institutions advising more than 15 mutual funds and pooled funds. Overall, Los Angeles Capital manages over 50 portfolios for clients in the U.S., Europe and Asia.
As of December 31, 2017
Los Angeles Capital Management and Equity Research, Inc. (“Los Angeles Capital”) was formed in 2002 when the four senior managers of Wilshire Asset Management completed a buyout of Wilshire’s active equity management business which they had developed. The entire portfolio team, including key decision makers who worked together for fifteen years, came to Los Angeles Capital to focus exclusively on the Dynamic Alpha Stock Selection Model® and the proprietary technology used in managing active equity portfolios.
The Firm is a corporation and 100% employee owned. The only change in the ownership structure of the firm since inception has been to increase the number of employee owners and owners’ share positions. Currently, Los Angeles Capital has 26 employee-owners of the firm and over 75 employees overall. The firm manages $29.9 billion as of December 31, 2017.
- Management buyout of the active management business including Los Angeles Capital’s Dynamic Alpha Stock Selection Model® (the “Model”), formerly the Dynamic Alpha Model, from Wilshire Associates. Four founding principals create Los Angeles Capital with a total of nine investment professionals. The establishment of a separate company enables the investment team to focus 100% of their efforts on the Model and creates a greater alignment of interest between the investment team and the firm’s investors.
- Robust regression introduced to minimize the impact of outliers on factor pricing.
- First proprietary trading algorithms (“Wave Optimization”) developed to lower transaction costs. By capturing favorable real-time price movements in securities, implementation shortfall numbers decreased by 25%. The introduction of proprietary algorithms largely removed broker discretion for the timing of trades.
- Filtering techniques implemented to adjust factor prices for measurement error and model error. The goal of the enhancements is to improve factor pricing during periods of high market volatility.
- First 130/30 portfolio funded to capture higher information ratios in large cap portfolios.
- Investment universe expanded to European securities through the completion of research on the European Model and associated factors. First MSCI European mandate funded.
- Investment universe expanded to Pacific Basin securities through the completion of Japan and Asia Ex-Japan models.
- Passed $5 bn in firm assets under management.
- Established dedicated Portfolio Management area to enhance portfolio oversight and deepen risk control.
- Daily risk model implemented to enable risk estimates to better adapt to market shifts.
- Investment universe expanded to Emerging Markets securities. Emerging Markets private placement vehicle launched in December.
- Global Equity and Global Managed Volatility products funded.
- Established dedicated Portfolio Risk Management Department within the Research group.
- Formed Los Angeles Capital Global Funds PLC in Ireland, an affiliate of Los Angeles Capital to manage money for non-U.S. clients in UCITS registered investment funds.
- Initiated the Los Angeles Capital Management Committee to oversee day to day firm activity.
- Firm passed $10 billion in AUM.
- Robust optimization research and implementation completed.
- Launched first EAFE portfolios.
- Launched a Collective Investment Trust incorporating our U.S. Large Cap Growth strategy to service the 401K market.
- Introduced first 130/30 Active Extension portfolios for U.S. Large Cap Value and EAFE.
- Firm passed $14 billion in AUM.
- Developed Augmented Risk model to capture incremental, transitory investment risks from the Dynamic Alpha Model.
- Developed a multi-day horizon trading strategy for value-oriented trades.
- Implemented new order management system for improved efficiency in trading, portfolio management, and operations.
- Launched first ACWI ex-U.S. portfolio.
- Ranked in Pensions & Investments' 2014 Best Places to Work in Money Management (50-99 employees category).
- Passed $18 billion in AUM.
- Became a Signatory of the PRI.
- Launched Deep Value U.S. Equity strategy.
- Developed Long Term Alpha Forecasts.
- Ranked in Pensions & Investments' 2015 Best Places to Work in Money Management (50-99 employees category).
- Formed LACM Global, Ltd, a wholly-owned U.K. subsidiary.
- Incorporated Multi Level Modeling ("MLM") into global portfolios.
- Passed $20 billion in AUM.
- LACM Global, Ltd. registered with the FCA.
- Launched Los Angeles Capital Global UCITS fund.
- Passed $25 billion in AUM.
- Generating alphas on more than 9,000 stocks.
- Added News Adjusted Residual Factor.
- Incorporated unstructured data into the investment process.
- Launched Global Market Neutral and developed Global Small Cap Strategy.
- Ranked in Pensions & Investments' 2017 Best Places to Work in Money Management.
+Board of Directors
+Relationship Management & Marketing
Los Angeles Capital has created a unique culture and investment approach. The following videos explore selected areas that our investment professionals represent with passion and experience.
History and Future of Los Angeles Capital01:05 minutes
Distinctive Investment Approach01:25 minutes
Elements of the Dynamic Alpha Model01:24 minutes
Dynamic Elements in Global Strategies01:44 minutes
Trading Function01:08 minutes
Integrating Risk Management Into the Investment Process01:21 minutes
Factor Selection in Quantitative Equity01:37 minutes
Discussion of Portfolio Management01:53 minutes
Factor Investing02:42 minutes
A Managed Volatility Approach to Low Volatility Investing02:42 minutes
Diversity and Inclusion01:20 minutes
A Passion for Responsible Investing02:12 minutes