Today fintech platform iCapital announced a consortium that plans to use enterprise blockchain in the alternative investment sector by creating a golden record of transactions. Consortium participants include Apollo, BlackRock, Blackstone, BNY Mellon, Carlyle, KKR, Morgan Stanley, State Street, UBS, and WestCap.
Having a single shared transaction record eliminates duplication of effort and the costly reconciliation processes between parties. Additionally, it enables greater transparency. If successful, it could radically reduce costs.
“We see the potential distributed ledger technology has to significantly improve both efficiency and security across the alternatives industry,” said Jerry Pascucci, Head of Global Alternative Investment Solutions at UBS Global Wealth Management.
Almost all the consortium participants have existing blockchain activities. For example, Apollo has partnered with Figure Technologies to put funds on a blockchain. Carlyle acquired funds distribution platform Calastone, which has used blockchain for years. BNY Mellon and State Street have both created divisions to focus on digital assets.
iCapital hopes to add additional asset and wealth managers. The company currently services $112 billion in client assets.
“The value in a private, permissioned, distributed ledger solution is that it creates one single golden source of data – eliminating the need for multiple reconciliations, allowing all the parties in a transaction to read from and write to the same record,” said Tom Fortin, Chief Information Officer of iCapital.
“This synchronized approach enhances reliability, security, and efficiency. It is the latest technical innovation that we are developing to enhance our platform capabilities, and the alternative investment ecosystem more broadly, for the benefit of all participants.”
Several other capital markets sectors are implementing blockchain technology, including the fund distribution industry, such as Allfunds, Calastone, FundsDLT, Iznes, FundAdminChain, and others. In Australia, the ASX post-trade solution is also creating a DLT-based golden record. And the DTCC is developing blockchain solutions to enable T+1 stock settlement as well as for derivatives.