In a SEC filing, JP Morgan Chase says it has raised $1.2 billion for a Digital Growth Fund that will invest in social media-related companies that have already established viable business models and revenue streams but have yet to undergo initial public offerings. The primary targets: Twitter, Zynga, Skype, LinkedIn and Groupon.

The irony, of course, is that these companies have no need of JP Morgan’s capital. The investors that have funded these social media companies – New Enterprise Associates in Groupon, Accel Partners and Kleiner Perkins in Twitter, Google and Softbank in Zynga – are flush with cash and would ante up more money if their portfolio companies are in need.

However, JP Morgan’s cash could help them increase the value of their investments. So although Twitter was valued at $3.7 billion in December, JP Morgan expects to invest $450 million at a $4.5 billion valuation. So if JP Morgan chooses to play it could end up investing at lofty valuations that offer little real value to investors but help spike the valuations of the venture funds that have invested in these social media companies.

JP Morgan’s social media fund offers little that investors cannot do on their own. Goldman, at the least, was offering its investors an opportunity to invest in Facebook at a price of its own choosing. Private exchange networks such as Second Market, SharesPost and Xpert Financial now offer accredited investors – including institutions and individuals – the opportunity to trade shares in Facebook, Groupon and other social media companies with lesser fees and even lesser paperwork.

So why is JP Morgan planning a social media fund and who is it reaching out to? Sources familiar with JP Morgan point out that the firm is simply trying to cash in on the hype around social media. JP Morgan has everything to gain – an estimated $13 million in start-up fees, additional management fees, profits from the venture capital fund as well as the possibility of banking fees if these companies choose to go public and include JP Morgan in the underwriting syndicate.

To raise capital for its social media fund, JP Morgan has reached out to wealthy individuals, many of whom are already its clients, and to family offices – investors who want a piece of social media companies but are mostly not equipped to judge their viability. JP Morgan has bypassed institutional investors such as pension funds and endowments who are more demanding and who are increasingly wary of institutionally offered funds.