JPMorgan Chase expects the fund to leverage another $1 billion in private investment.
NEW YORK CITY—JPMorgan Chase launched today a $500-million fund that will eventually invest a total of $500 million in up to 30 U.S. cities.
The program centers around an “AdvancingCities Challenge” competition. JPMorgan Chase issued a request for proposals today for cities to apply for possible funding that closes on Nov. 30, 2018. Winners will be announced in the spring of 2019.
The bank believes its $500-million fund will leverage $1 billion in outside capital, bringing the total capital infusion to $1.5 billion in the selected cities.
JPMorgan also announced plans to take this initiative global. This fall, JPMorgan Chase says it will announce a new large-scale investment in a global city where the benefits of economic growth are not reaching all of its residents.
The AdvancingCities Challenge will make investments in the select US cities to support what it terms are “collaborative and sustainable solutions that address cross-cutting challenges and help more people benefit from a growing economy.”
JPMorgan Chase states that it is looking for proposals from cities that would support existing local coalitions of elected, business and non-profit leaders geared at addressing major social and economic challenges such as employment barriers, financial insecurity and neighborhood disinvestment.
“Opportunity is not shared equally across neighborhoods,” says Jamie Dimon, chairman and CEO of JPMorgan Chase. “Businesses can and must step up to help change the status quo by creating a better future for all, no matter where they live. It is in our best interest and the right thing to do.”
The fund will invest in cities where conditions exist to help those who have not benefited from economic growth. “This includes demonstrated, strong collaboration across the public and private sectors on solutions that create opportunity for people at risk of being left out of economic growth,” JPMorgan states in its fund launch announcement.
Half of the $500 million will consist of philanthropic investments and up to $250 million will be low-cost, long-term capital deployed by the new AdvancingCities Investment Fund, JPMorgan reports. The capital will be used to fund sustainable projects in critical sectors of underserved neighborhoods that frequently lack access to traditional financing, such as affordable housing, commercial real estate and small businesses.
JPMorgan Chase pointed to the success it achieved in Detroit where $50 million in loan funds supporting Community Development Financial Institutions have leveraged more than $233 million from outside investors, as well as its national PRO Neighborhoods initiative, which has enabled CDFIs to leverage an additional $549 million in capital for neighborhood revitalization projects.
JPMorgan Chase's Dimon said in a question and answer session as part of the fund's launch today, that if the fund is successful and provides some profit, he would double or triple it in the future.
Cities interested in applying for the AdvancingCities Challenge should visit www.jpmorganchase.com/advancingcities.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
