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JPMorgan Chase To Acquire ESG FinTech OpenInvest

OpenInvest offers environmental, social, governance (ESG) investment management products and impact reporting services.

Video source: YouTube, OpenInvest

JPMorgan Chase & Co (NYSE: JPM ) has agreed to purchase San Francisco-based OpenInvest, a financial technology company that helps professionals customize and report on values-based investments. 
Under the terms of the deal, OpenInvest will retain its own brand and be integrated into JPMorgan Chase’s private bank and wealth management client offerings, the companies said in a press release.

Commercial terms were not disclosed, and the transaction is expected to close in the third quarter.

Founded in 2015 by Conor Murray, Joshua Levin and Philip Wei, OpenInvest has received backing from investors including Andreessen Horowitz, Y Combinator and QED and raised about $25 million in funding to date, according to CNBC.

Levin, OpenInvest’s chief strategy officer, said, “Our partnership with JPMorgan combines leading ESG technologies with America’s largest bank and the ability to reach nearly half of all American households.”

Mary Callahan Erdoes, JPMorgan’s chief executive officer of asset & wealth management, said the acquisition will enable the bank’s financial advisors to better customize client investments.

“Clients are increasingly focused on understanding the environmental, social and governance (ESG) impact of their portfolios and using that information to make investment decisions that better align with their goals,” she said.

Ben Hesse, JPMorgan’s head of strategy and business development for asset & wealth management, said acquiring OpenInvest “further advances our strategic focus on sustainable investing.”

JPMorgan already has $2.4 trillion in ESG-related assets under management and $4 trillion in client assets overall, according to the bank.

OpenInvest hopes to eventually roll out its technology to the general public to help consumers make purchasing decisions and charitable donations that align with their values, CNBC reported.

Tuesday’s announcement marks the third acquisition of a fintech start-up by JPMorgan since December 2020, when it bought Boston-based 55ip, which helps financial advisors automatically create tax-efficient portfolios.

Earlier this month, JPMorgan said it was acquiring UK-based digital wealth management platform Nutmeg for $972.8 million to help boost its overseas digital banking efforts.

The latest move comes as the sustainable investing movement continues to gain traction and investors hunt for stocks that score well on ESG metrics. 

During the first quarter of 2021, sustainability-focused funds have attracted record inflows, bringing global assets under management to almost $2 trillion. 

ESG investing accelerated in recent months due to several factors, including the pandemic’s disproportionate effect on minorities, social unrest in the US, as well as deadly winter storms and devastating wildfires, a report from Morningstar found. 


Source: Equities News

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