Last year Northern Trust launched a blockchain administration system for the private equity market developed with IBM. Yesterday Northern Trust announced it used the blockchain system for a live capital call.
In private equity funds, investors usually make an agreed financial commitment to the fund. But if the fund isn’t ready to use all the money and is waiting to make a purchase, the investors can keep hold of the cash. Once the fund needs the money for an investment, they make a capital call.
Because private equity is both legal and paper intensive, the blockchain platform aims to automate the administration. Northern Trust has also worked with significant audit forms to enable transaction and event auditing.
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