JPMorgan, HSBC Invest in ESG Specialist Companies

JPMorgan and HSBC Asset Management have both made sustainability-themed acquisitions in recent days, as competition heats up among asset managers to provide specialist offerings.

New York-headquartered JPMorgan has acquired financial technology firm OpenInvest, which offers environmental, social and governance (ESG) themed investment products, for an undisclosed sum. OpenInvest will retain its brand and will be integrated into JPMorgan’s private banking and wealth management client offerings.

“Clients are increasingly focused on understanding the ESG impact of their portfolios and using that information to make investment decisions that better align with their goals,” said JPMorgan Asset and Wealth Management CEO, Mary Callahan Erdoes.

OpenInvest was founded in 2015 with backing from venture capital and fintech investors. The partnership with the US’s largest bank will allow OpenInvest to reach nearly half of all American households, according to a press release announcing the deal.

Meanwhile, HSBC Asset Management is taking a minority stake in RadiantESG, a US consulting firm specializing in ESG and diversity and inclusion work.

The company will become RadiantESG Global Investors, providing advice on investment opportunities for institutional and wealth management clients.

RadiantESG was founded by Heidi Ridley and Kathryn McDonald, respectively the former CEO and head of sustainable investing at quant firm Rosenberg Equities.

HSBC Asset Management CEO Nicolas Moreau said RadiantESG’s “unique approach” made for a “powerful value proposition [with] credibility in the marketplace and a solid foundation for delivering strong risk adjusted returns”.

Interest in ESG investment has increased rapidly in the past two years. Approximately three-quarters of professional investors are now implementing some form of ESG strategies, up from 65% in 2018, according to a recent survey by Natixis Investment Managers.