Today alternative asset manager Apollo Global Management announced a deal with Figure Technologies to collaborate on blockchain initiatives. Figure founded the Provenance blockchain, which is used for various financial applications, including asset backed securities (ABS), managing cap tables for stocks and, more recently, payments. In May, Figure raised $200 million at a $3.2 billion valuation. The company was founded by Mike Cagney, who also founded SoFi.
The deal with Apollo is to list funds on the blockchain, asset securitization and digital marketplaces. Figure started by originating mortgages, or more specifically Home Equity Loans and Home Equity Lines of Credit (HELOCs), and it created a digital marketplace on the Provenance blockchain to sell on HELOCs. It has since expanded to enable others to originate loans and created a marketplace for equities and funds after getting SEC clearance as an Alternative Trading System (ATS).
“This collaboration extends Apollo’s strategy of working with best-in-class fintech firms to seek the operational and cost benefits that blockchain and other technologies can bring to bear,” said John Zito, Senior Partner and Deputy CIO of Credit at Apollo.
Apollo has around $463 billion in assets under management, of which $323 billion is credit, and is pretty serious about blockchain technology. It also has an alliance with Motive Partners, the private equity firm that focuses on fintech. Motive has two heavy hitters that combine strong blockchain and institutional experience. Blythe Masters spent much of her career at JP Morgan, especially in ABS, and was the CEO of blockchain startup Digital Asset. Until last month, Motive’s Peter Hiom was the Deputy CEO of the Australian Securities Exchange (ASX) and was responsible for its CHESS blockchain-based post trade solution, which is being developed in conjunction with Digital Asset.
Meanwhile, there are quite a few initiatives focused on blockchain and funds, although, unlike Figure, most are based in Europe. These include FundsDLT initiated by the Luxembourg Stock Exchange and backed by Credit Suisse, Clearstream and Natixis. Carlyle-owned Calastone, the fund distribution platform, has used blockchain for order routing since 2019. And Allfunds is working with ConsenSys for its blockchain platform.