Banking behemoth JPMorgan Chase (NYSE:JPM) wants to take the sustainable-investing trend to the next level.
To do that, say media reports, the biggest U.S. bank by assets has agreed to buy OpenInvest, a San Francisco-based start-up backed by Andreessen Horowitz and founded by former Bridgewater Associates employees.
It’s the third acquisition of a fintech start-up by JPMorgan since December, when the bank bought 55ip, a company that automates the construction of tax-efficient portfolios. This month, JPMorgan said it was acquiring U.K.-based robo-advisor Nutmeg to help boost its overseas digital banking efforts.
CEO Jamie Dimon said last year that the bank would be "much more aggressive" in searching for potential takeovers to help it bolt-on capabilities and fend off threats from fintech and Big Tech players alike. The traditional banking industry has begun to lose ground to fast growing, disruptive players including PayPal (NASDAQ:PYPL) and Square (NYSE:SQ), while Alphabet (NASDAQ:GOOGL) and even retailer Walmart (NYSE:WMT) have each announced intentions in consumer finance.
The bank’s latest move, for deal terms that couldn’t be determined, will help JPMorgan’s financial advisors customize clients’ investments in ESG, the broad category that includes environmental, social and governance factors. ESG funds have attracted record inflows this year, pushing global assets under management to almost $2 trillion.
Rather than just plowing money into ESG investment funds or excluding certain companies from a stock portfolio, clients can use OpenInvest to create highly personalized, dynamic values-based portfolios. The company pulls data from more than 35 sources to feed decision engines embedded in its tools.
JPM shares grew by 51 cents to $154.84 early Tuesday.
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