Today FundsDLT, the blockchain-based fund distribution platform, said it received regulatory approvals for launch at the start of July. The platform is now live and the first asset manager to go into production will be Azimut Investments, the Luxembourg arm of Italy’s Azimut Group, which has EUR 75 billion ($88 bn) in assets under management.
The Luxembourg DLT platform was founded by a subsidiary of the Luxembourg Stock Exchange and is backed by Clearstream, Credit Suisse Asset Management and Natixis Investment Managers.
Fund distribution costs are notoriously high. Apart from the fund manager’s fees, Fitz Partners found that distribution costs for cross border equity funds make up 63% of fees, with administration coming a distant second at 23%.
FundsDLT aims to reduce these costs through automation by sharing funds data in a permissioned fashion between the asset manager, distributor and client investor. This enables real time cash reconciliation and operates via APIs which supports SWIFT messaging.
Olivier Portenseigne, CEO of FundsDLT, commenting on the launch said: “Asset and wealth managers can now be able to have a stronger relationship with and more knowledge of the final investor while reducing costs,” Olivier Portenseigne, CEO of FundsDLT.
“The data and insights inherent in a DLT infrastructure will also allow our clients to propose more personalized products and services and grow their client base.”
The solution uses Quorum, the enterprise blockchain flavor of Ethereum.
Azimut said it aims to innovate with technology, and this is not its first step with blockchain. Earlier this year, it partnered with Swiss digital asset bank Sygnum to tokenize a portfolio of loans to SMEs, creating a blockchain-based digital security.
Meanwhile, other organizations exploring blockchain for fund distribution include Calastone, Allfunds, IZNES, amongst others.