J.P. Morgan acquires fintech startup OpenInvest
Backed by capital from Andreessen Horowitz, Y Combinator, QED, and others, OpenInvest was founded in 2015. The company will retain its own brand and be integrated into J.P. Morgan's Private Bank and Wealth Management client offerings.
"Our partnership with J.P. Morgan combines leading ESG technologies with America's largest bank and the ability to reach nearly half of all American households," said Joshua Levin, Co-founder and Chief Strategy Officer, OpenInvest.
The acquisition of OpenInvest is J.P. Morgan’s third acquisition of a fintech start-up in six months. The bank acquired 55ip, a firm that automates the construction of tax-efficient portfolios, in December 2020 and followed that with the acquisition of UK-based robo-advisor Nutmeg earlier this month.
With OpenInvest, J.P. Morgan can allow its clients to create highly personalised, dynamic values-based portfolios. This will grant them exposure to ESG investment funds provided by the financial institution.
"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," said Mary Callahan Erdoes, CEO, J.P. Morgan Asset & Wealth Management.
A focus on ESG
J.P. Morgan is focusing on ESG due to the rapid growth in the sector. They are trying to finance and facilitate more than $2.5 trillion over 10 years to advance climate action and sustainable development. In addition, they are aligning key financing portfolios with the goals of the Paris Agreement and working with clients to finance their decarbonisation strategies.
“While our firm — or even the financial sector as a whole — cannot solve these challenges alone, we have an important role to play. It is estimated that up to $150 trillion will be needed globally over the next 30 years to achieve the Paris Agreement’s goals.15 This means that, for companies to succeed through energy transition — that is, become more efficient, innovate, evolve and stay competitive in a changing world — they will need significant capital and strategic support.” the company said in a recent ESG report.
State Street launch crypto service for private funds clients
State Street Corporation is now expanding its push into the cryptocurrency industry by launching new digital asset services. It will provide digital and cryptocurrency asset fund administration capabilities for the firm’s private funds clients.
In partnership with Lukka, a leading enterprise crypto asset data, and software provider, State Street will support its private fund clients with collection, standardisation, enrichment, reconciliation, processing, and reporting related to crypto and other digital assets.
The partnership is State Street’s latest effort in the digital and crypto-asset space following the launch of State Street Digital, a division focused on addressing the industry’s evolving shift to digital finance, and comes after Lukka’s Series C funding round in December of 2020, which was led by State Street.
A rise in digital assets
“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands,” said Nadine Chakar, head of State Street Digital. “Our work with Lukka will leverage their software and data in order to help expand our digital and crypto asset fund administration capabilities to alternative managers is just another advancement in our digital solution set and marks a very exciting development.”
State Street will leverage Lukka’s product suite, which includes a proprietary middle and back-office data management solution, purpose-built for blockchain and crypto-asset data, as well as Lukka Reference Data, and Lukka Prime Pricing Data. This will enable State Street to consume crypto assets that are comingled within a private client’s traditional alternative investments portfolios.
“As our clients continue to adopt digital assets, such as crypto, we’ve seen increasing interest among investors for institutional quality middle and back-office offerings that support diversified portfolios,” said Jen Tribush, alternatives lead for State Street Digital.“ Lukka was the ideal partner to help provide these services given their leading position in crypto asset data as State Street continues to add to our growing offering in the digital asset space.”