Kinexys by JP Morgan has launched its latest offering, Kinexys Fund Flow, to streamline fund distribution, particularly for alternative funds. It partnered with fund administrator Citco for the first transaction, which involved tokenizing a private equity fund made available to clients of JP Morgan Private Bank. The solution uses JP Morgan’s Kinexys permissioned blockchain, the same distributed ledger that powers its blockchain-based bank account.
Blockchain technology offers three key benefits for alternative fund distribution: operational efficiencies that reduce investor costs, potentially expanded access through fractionalization, and mass personalization of portfolios. JP Morgan explored the personalization potential in 2023 trials with asset manager Apollo. However, that third benefit requires the streamlined efficiencies as a foundation. Kinexys Fund Flow focuses on these foundational efficiency gains, ensuring all parties in the fund administration and distribution chain have aligned records and automated processes.
While the Kinexys solution is unique in its focus on alternative funds, blockchain has been applied to fund distribution by others with tangible automation benefits. For example, Standard Chartered launched a DLT-based transfer agent system using Clearstream’s FundsDLT offering. The new solution is 60% more efficient than the legacy one, resulting in Standard Chartered quickly recouping its investment.
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