Northern Trust has collaborated with IBM and other key stakeholders to launch what it says is the first commercial deployment of blockchain technology for the private equity (PE) market. The US-based financial services group commented: “While PE returns can be attractive, the infrastructure supporting PE has seen little innovation in recent years at a time when investors are seeking greater transparency, security and efficiency.
“To address this need, Northern Trust and IBM built a security-rich blockchain, or distributed ledger solution, based on the Hyperledger Fabric. It is available for use for managing the administration of a private equity fund managed by Unigestion, a Geneva, Switzerland-based asset manager with US$20bn in assets under management.”
Northern Trust added that the blockchain network provides real-time insight and transparency to all parties, including fund managers and investors and allows regulatory access when required. The network has been designed to support compliance with current, local regulations and both government and regulator were kept informed during the development process.
The blockchain solution allows the fund to transfer ownership stakes and be managed, serviced and audited throughout the investment lifecycle on a transparent platform offering “one version of the truth” to participants who gain access via secured means. Initially, Northern Trust will make the solution available to clients on a selective basis.