This week the Apex Group, a global financial services company, announced it had taken a majority stake in FundAdminChain (FAC), the blockchain fund tokenization platform. Apex provides an array of financial services, which includes a big footprint in fund administration. In August last year, Apex agreed to pay $2 billion to take over Sanne Group, which has a significant alternative funds administration business.
The combination of Apex and Sanne’s business provides significant potential deal flow for FundAdminChain. Blockchain enables asset managers, investors, transfer agents and other service providers to connect to a shared network. By tokenizing funds, Apex expects to cut the cost of launching and distributing funds as well as enabling new revenue opportunities.
Blockchain acts like a shared database which means there’s a golden record of transactions, reducing the need for numerous API integrations. Additionally, because it’s a shared database, blockchain automatically logs the list of fund investors, simplifying administration.
It was also announced that FundAdminChain will launch a regulated marketplace for digital funds.
The startup was founded in 2019 by Brian McNulty who previously worked at enterprise blockchain firm R3 which is also a shareholder. The company raised just over £2.1 million ($2.75m) in funding and uses R3’s Corda distributed ledger (DLT).
“Recent developments in Distributed Ledger Technology and Digital Asset Tokenisation are driving significant transformation within the asset management industry,” said Peter Hughes, Founder and CEO of Apex Group. “Our majority shareholding of FAC will allow us to harness the potential of these new technologies, and drive the adoption of tokenised funds, and improved ways of launching, distributing, trading and settling funds for our clients.”
Meanwhile, there’s significant blockchain activity in the fund sector. In the U.S., RealBlocks partnered with LaSalle last week and Figure Technologies has a relationship with Apollo. In Europe, incumbents such as Allfunds, Calastone and FNZ are using blockchain. The Luxembourg Stock Exchange founded FundsDLT, which is in production, and in France, the UCITS fund distribution platform IZNES is powered by blockchain.