American banking giant, JPMorgan to acquire San Francisco-based OpenInvest, a FinTech startup that allows customisation and reporting on ESG investments.
Under the agreement, OpenInvest will continue to retain its own brand and be integrated into JP Morgan’s Private Bank and Wealth Management client offerings. The terms of the deal were not disclosed.
Founded in 2015 by Conor Murray, Joshua Levin and Phillip Wei, OpenInvest is a YCombinator and Andreessen Horowitz-backed startup “powering the post-fund future.” It was built with a core focus on helping advisors unlock the true impact of their client’s investments. The firm offer premium ESG investing products that reflect the impact of clients’ investments.
The demand for such value-based investment services boomed with the recent traction of ESG funds, and OpenInvest helps in creating highly customised and value-based portfolios. The startup fetches data from more than 35 sources to feed its decision engine.
Commenting on the takeover OpenInves CEO Conor Murray said, “At OpenInvest, we believe that aligning capital with social and environmental values is a critical driver of widespread change.”
The announcement follows JP Morgan Asset Management’s recent acquisition of 55ip, a financial technology company focused on delivering tax-smart investment strategies through model portfolios and UK-based robo-advisor Nutmeg. Over time, JP Morgan will leverage OpenInvest’s ESG capabilities with 55ip’s tax-smart investment strategies to deliver customised solutions to Private Bank and Wealth Management clients that are values-aligned and tax-efficient.
Commenting on the importance of ESG initiatives, JP Morgan Asset & Wealth Management CEO Mary Callahan Erdoes said, “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.”
JP Morgan Asset & Wealth Management has more than $2.4tn in ESG-integrated assets under management and $4tn in client assets overall.
JP Morgan 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.
Copyright © 2021 FinTech Global
