JP Morgan to acquire fintech start-up OpenInvest
US banking giant JP Morgan has agreed to buy financial technology start-up OpenInvest.
OpenInvest offers environmental, social and governance (ESG) investment products
Founded in 2015 and backed by the likes of Andreessen Horowitz, Y Combinator and QED, OpenInvest offers environmental, social and governance (ESG) investment management products and impact reporting services.
Joshua Levin, co-founder and chief strategy officer at OpenInvest, says: “Our partnership with JP Morgan combines leading ESG technologies with America’s largest bank and the ability to reach nearly half of all American households.”
The firm claims it “helps advisors unlock the true impact of their clients’ investments” by creating low-cost portfolios based on clients’ values.
“Clients are increasingly focused on understanding the environmental, social and governance impact of their portfolios, and using that information to make investment decisions that better align with their goals,” says Mary Callahan Erdoes, CEO of JP Morgan Asset and Wealth Management.
OpenInvest will retain its own brand and be integrated into JP Morgan’s private banking and wealth management client offerings. The terms of the deal were not disclosed and it is expected to close in the third quarter this year.
Investment strategy
JP Morgan’s asset management arm also recently acquired US fintech 55ip, which helps companies design tax-smart investment strategies.
The bank says it plans to leverage OpenInvest’s ESG capabilities with 55ip’s investment strategies to create portfolios that are “values-aligned and tax-efficient”.
“This acquisition further advances our strategic focus on sustainable investing,” says Ben Hesse, head of strategy and business development for JP Morgan Asset and Wealth Management.
The news concludes a busy month for the bank following its acquisition of London wealthtech Nutmeg in a deal estimated to be £500-700 million.
Nutmeg will complement the launch of JP Morgan’s digital bank Chase, which is due to launch in the UK later this year.
