JPMorgan Chase CEO Jamie Dimon on Monday announced the firm is moving forward with a $1.5 trillion plan to invest in industries critical to national security, which he said is critical for the world’s security.
The firm’s Security and Resilience Initiative will invest the $1.5 trillion over a decade, and will include direct equity and venture capital investments of up to $10 billion to help select companies primarily located in the U.S. for the purpose of boosting strategic industries.
Dimon said the initiative aims to improve global security by making the U.S. more resilient in strategic industries, explaining on a press call about the initiative that, “You need America to be very, very strong to secure global security.”
“If America isn’t very strong, there’s no global security, so it is the key to getting it all done,” Dimon said. “Doesn’t mean you can’t help other countries and other industries do the same kind of stuff.”
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Dimon noted as an example that JPMorgan has worked on improving Europe’s supply chain for liquefied natural gas (LNG), a critical energy source that the U.S. has become one of the world’s leading exporters of, as the continent looks to reduce reliance on Russian LNG.
JPMorgan’s $10 billion in equity capital could be deployed as venture capital or investments in smaller companies or middle market companies looking to accelerate their growth and build new facilities, Dimon noted. He explained that he sees more funding going to smaller and middle market companies.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 307.97 | +7.08 | +2.35% |
Dimon pointed to his chairman’s letter from last year — in which he stressed the importance of national security issues like energy resiliency, national resiliency and economic strength — as helping prompt those conversations about investing in those strategic areas.
“This was an internal effort started by a lot of us talking about things we can do to help the United States of America’s resiliency,” he noted.
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Dimon emphasized that JPMorgan’s investment won’t be philanthropic in nature, and the bank expects to see a return on investment through the initiative given the focus by investors and the government on security and resiliency.
“This is not philanthropy. This is 100% commercial. We’re going to take our resources of research bankers and investors, and we are going to scour the United States and maybe the world for new opportunities,” he explained.
“There are plenty, because a lot of venture capital is going to this area. A lot of government focus is going to this area. There’s going to be a lot more money spent down the road on drones and ships and autonomous vehicles, stuff like that. It’s 100% commercial,” Dimon said.
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“We do not expect lower commercial returns. If there’s philanthropy attached to it, it will be very specific. For example, if there are identified training needs for welders in a certain part of the world, we may have our lending teams go in and help finance a local vendor… that educates people how to do welding,” he explained.
Dimon and other JPMorgan executives on the press call, including asset and wealth management CEO Mary Erdoes and commercial and investment banking co-CEO Doug Petno, noted that any philanthropy provided would be additive to the initiative on top of the firm’s $1.5 trillion announcement.
Dimon said that Erdoes and Petno will oversee the initiative, and JPMorgan will hire an investment team to implement it.
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