A private equity fund run by Swiss-based asset manager
Unigestion is using blockchain technology built by Northern
Trust and IBM.
A statement on Wednesday said a "security-rich blockchain"
is managing the administration of the Guernsey-domiciled
Tech giant IBM and Chicago-based Northern Trust said the
solution aims to boost efficiency, security and
Fund administration, a set of services underpinning
traditional and alternative funds, is one area where blockchain
could make an impact.
Accounting, portfolio valuation, fund pricing and
shareholder record-keeping are some of the traditional admin
However these functions can be time consuming and
Clients have been calling for fee reductions and
administrators have been reviewing infrastructure to reduce
operational costs and meet regulatory requirements.
State Street, SS&C, BNY Mellon and Northern Trust are
among the current leading players in the sector which has
consolidated in recent years.
Meanwhile, the private equity industry remains notorious for
being opaque and access to any data is difficult.
Blockchains, or distributed ledgers, are increasingly viewed
by market players as a legitimate way to boost transparency,
cut costs and streamline processes.
Northern Trust and IBM added that their network provides
real-time insight to the fund managers, investors and
In addition, the fund can use the technology to transfer
ownership stakes which can be managed, serviced and audited
throughout the investment lifecycle.
Initially Northern Trust will make the solution available to
clients on a selective basis.
If successful, the technology could appeal to the wider
private equity market.
"Current legal and administrative processes that support
private equity are time consuming and expensive," said Peter
Cherecwich, president of corporate & institutional services
at Northern Trust.
"A lack of transparency and efficient market practices leads
to lengthy, duplicative and fragmented investment and
"Northern Trust’s solution is designed to
deliver a significantly enhanced and efficient approach to
private equity administration."