Chase’s new investment portfolio includes $300 million in shares of a new mortgage company, $500 million in bonds, and $1.5 billion in other investments, according to a person familiar with the deal.
The person, who asked not to be identified because the transaction is private, said the investment could come with the new mortgage giant, the same one that Chase is also acquiring for about $500 billion.
The bank also plans to buy stakes in another mortgage lender, the Mortgage Bankers Association, the person said.
Chase, which was the first major bank to launch an investment fund, is aiming to raise $250 billion by 2021, with a goal of raising $400 billion by 2020.
Chase is betting on a strong housing market and is looking for more than just an injection of cash to fund its expansion plans.
The bank’s investment fund will be used to invest in real estate assets that help finance its mortgage and mortgage-backed securities business, according a person close to the transaction.
Citi and Goldman Sachs, the biggest bank and hedge fund owners in the U.S., also are exploring ways to raise money from the investment, according the person familiar.
As part of the deal, Chase is going to acquire the mortgage company at a valuation of about $2.5 trillion, which is about twice what Goldman Sachs estimates it will sell for, the source said.
This is the second time that Chase has bought mortgage companies.
The previous time was in 2012 for $3.3 billion.
The deal includes a loan for $250 million to the Mortgage Banks Association, according, according.