JPMorgan is expanding its private equity investment team focused on sustainable growth equity opportunities.
The New York bank recently appointed Alex Bell, who has nearly two decades of private equity experience, as a partner on the sustainable investment team within its JPMorgan Private Capital group. Bell joins from Tikehau Capital, where he spent about a year as head of the firm’s North American private equity climate practice.
Before Tikehau, Bell spent more than four years at Caisse de Dépôt et Placement du Québec, where he helped start a 500m Canadian dollar (roughly $366m) platform. The strategy invests in late-stage venture and early-growth private equity opportunities in energy transition, sustainable food and agriculture and industrial decarbonisation.
JPMorgan’s hiring of Bell, who is Hispanic, adds to one of the more diverse leadership teams in the growth equity industry. The two co-heads of the bank’s sustainable growth equity team, Osei Van Horne and Tanya Barnes, are both Black.
The bank set up the sustainable growth team in January 2022 and said it would anchor its first sustainability investment strategy with a capital commitment of as much as $150m, describing it as one of its largest commitments to an alternative-investment strategy. JPMorgan’s alternative investment arm managed $211bn as of December in strategies such as private equity and credit, hedge funds and real assets.
Jamie Dimon, the bank’s chair and chief executive, named climate change and inequality as two critical issues as the bank in 2021 announced plans to finance and facilitate $2.5tn of investments over 10 years to address climate change and sustainable development needs.
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“The first area that is of particular interest to us is around climate technology investing, particularly around decarbonising industrials and heavy industries,” Van Horne said. “Just to decarbonise the real estate, industrials, transportation and agriculture industries, which are responsible for 80% of [greenhouse-gas] emissions, that is a $1.8tn market opportunity.”
The sustainable growth team has made two investments so far. It led a $200m investment in Arcadia Power, a technology company aimed at fighting climate change, and a $42m investment in MineSense Technologies, a startup looking to improve carbon levels across the metals-mining industry.
Investments geared to improving the environment, social conditions or corporate governance, ESG for short, have broad support among institutional investors. One recent survey showed that 93% of such investors said they would walk away from an investment if it posed an ESG concern, and 50% cited better performance as a key reason to incorporate ESG elements in investing, according to the poll from consulting firm Bain & Co and the Institutional Limited Partners Association.
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Other big banks are also looking to expand their reach into sustainability. Goldman Sachs’s asset-management arm last year made a $100m growth investment in Recover Textile Systems, a company focused on sustainable fashion.
Some investors and limited partners have expressed concerns regarding the difficulties of measuring outcomes and goals for sustainable investing. The search for more clarity has driven investments in companies such as EcoVadis, which provides ESG ratings and benchmarking for businesses.
“We’ve really invested a lot in measuring both the carbon profile as well as the ESG-related characteristics of our investments,” Barnes said, to address apprehensions around quantifying environmental and social impacts.
“We’ve worked with our own internal experts as well as gotten third parties to help us verify all the data that we’re sharing out with our partners,” according to Barnes, who joined JPMorgan last year from Blackstone, where she was head of the private-equity firm’s impact-investing platform.
Write to Isaac Taylor at isaac.taylor@wsj.com
This article was published by The Wall Street Journal, part of Dow Jones
