Today it was announced that the fund distribution blockchain FundsDLT has secured a Series A funding round from Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange (LuxSE) and Natixis Investment Managers. Proceeds will go towards developing the platform. While the precise funding amount was not disclosed, a single digit Euro amount was raised from each of the three new investors. LuxSE was a founding investor.
FundsDLT aims to share data for funds and fund managers in a permissioned fashion, between the asset manager, distributor and client investor. Initially, the solution was part of Fundsquare, which in turn is a subsidiary of the Luxembourg Stock Exchange. In February last year it announced a Proof of Concept with Credit Suisse Asset Management and Portuguese investment distributor Banco Best.
Just a month later, Italian fund manager AcomeA SGR announced it had tested the platform. Currently, the aim is to launch the platform in nine to twelve months.
“The launch of FundsDLT is an important step toward our shared goal of promoting the adoption of blockchain and digital assets across the financial industry,” said Robert Scharfe, CEO of the Luxembourg Stock Exchange.
By sharing data between the three parties, the solution hopes to enhance transparency while saving money and remove redundant processes.
Michel Degen, Head of Credit Suisse Asset Management Switzerland and EMEA, said: “We continuously seek to ease the access to our products for clients. As part of our digitalization journey, we consider FundsDLT as a further powerful lever to increase efficiency but also to create new distribution channels, enabling considerable benefits for both clients and asset managers.”
Asked about the product roadmap, Paolo Brignardello, Fundsquare Head of Product Management and Marketing explained: “In the first phase we plan to attract Asset Managers and Asset Servicers who would like to reduce costs and create new funds to migrate existing investors to cost-efficient products with enhanced user experience. In this context, we will leverage our close relationships with more than 20 large institutions that acted as FundsDLT’s testing partners.”
He continued: “Furthermore, we plan to attract intermediaries and institutional clients that are looking to transform distribution activities towards digital offerings and in closer partnership with asset managers.”
The project uses an enterprise version of Ethereum, so it has decent performance and is permissioned. KPMG is an advisor.
Another platform with similar goals is Calastone, where its Distributed Market Infrastructure for mutual funds went live ten months ago.
Three months ago, a survey by State Street found that 92% of asset managers are bullish about distributed ledger technology (DLT).
Update: Added funding details, launch plans, and roadmap