Why 2 bankers say JPMorgan's $1.5 trillion effort to boost US dominance is unlike any work they've done before

Vasudha Saxena is the woman running the “engine room” of what she described as a “startup like none other.” The startup she’s referring to actually sits within the walls of the nation’s biggest bank.

Saxena is responsible for the strategy behind one of JPMorgan’s biggest bets: a decadelong plan to direct $1.5 trillion toward industries viewed as strategically important to the US, from defense and critical minerals to artificial intelligence and energy infrastructure.

Since the bank launched the Security and Resiliency Initiative in October, Saxena told Business Insider the work is harder than most dealmaking — and some of the most challenging work she’s done in her 25-year career.

The group’s mandate is to execute deals that fulfill the lofty goal of strengthening the country’s security, which often means navigating labyrinthine supply chains or persistent labor shortages.

On top of that, they’re coordinating between the government and private industries.

Eight months in, SRI has only grown its ambitions and announced last week that it’s bringing its efforts to Canada, after expanding to Europe in April.

The team is still hiring months after Jamie Dimon put out the initial broad call for talent, but anyone who applies has their work cut out for them.

Globally, it has financed at least $150 billion and invested more than $2 billion in equity so far.

Through the team, for example, JPMorgan served as a financial advisor to Dominion Energy on its $125 billion merger with NextEra Energy, and as an administrative agent and joint lead arranger for energy startup VoltaGrid for a $3 billion facility, according to its website.

After JPMorgan led a public-private partnership in July between MP Materials, a rare-earth mining company, and the US military department, executives asked Saxena, then the head of strategy for global banking, to join discussions about where they might execute similar deals.

Those conversations gave shape to SRI, which has built a skilled team to tackle its unique mandate.

Traditional investment banking deals include two parties: the buyer and seller.

SRI transactions almost always include at least three parties, and often closer to five or eight — there could be the company, the government, and private sector players. “They have a lot more complexity,” Saxena said.

Many projects require bespoke financial structures to make them commercially viable, including off-take agreements, where future customers commit to certain purchases down the line.

Mark Marengo supports SRI’s aerospace and defense coverage and has advised multiple companies on their deals with the Department of War, and said this administration is taking a “more proactive” approach to public-private partnerships. “That is just very different than what we’ve seen in the past,” Marengo, who has worked at JPMorgan for more than 30 years, said of how complicated some of the deals are.

While mission-driven, the new team is still a commercially minded, for-profit effort — it is, after all, part of the nation’s biggest bank. “The idea of SRI is not to make bad loans or make bad investments.

It is meant to meet our commercial returns,” Marengo said, adding that public-private partnerships where the client, government, and JPMorgan are all willing to extend themselves more than they would ordinarily have largely been successful in reaching that goal.

Saxena said it’s important that the group’s deals trade well, since commercial success will draw more interest and capital.

When JPMorgan CEO Jamie Dimon announced the initiative, he called on anyone interested in joining the team to “just give us a call.” The phone, so to speak, has been ringing.

Saxena said there’s been a surge of interest and that they’ve hired industry experts with backgrounds in banking, government, and consulting.

A few have experience related to the CHIPS Act, a 2022 law aimed at boosting semiconductor manufacturing.

Having people with diverse expertise is helpful, Marengo said, when industry-specific questions come up in client conversations.

By June, just over 25 people worked on SRI, hired from both within and outside the bank.

As recently as June 22, at least eight roles on the team were posted on JPMorgan’s website. “These are hard jobs to do,” Saxena said of positions on the team overall. “In some places, we are looking for absolutely unicorn talent, and we’ve been very lucky to find many of them.”