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.
The administration for the capital call was made using Northern Trust’s private equity blockchain based in Guernsey. The client was Emerald Cleantech Fund III LP, a venture capital fund focused on technology. Participants involved the investment advisor’s office in Zurich, the board of directors, and auditor PwC Channel Islands.
“Working in partnership with key clients and regulators, we continue to deploy additional distributed ledger capabilities that drive efficiency and security across the spectrum of private equity lifecycle events,” said Pete Cherecwich, President of Corporate & Institutional Services at Northern Trust.
Hans Dellenbach, Partner and CFO at Emerald Technology Ventures said: “Northern Trust’s technology and operations teams have built an industrial strength, scalable and secure cloud application that is fully micro-service based and uses advanced event-based communications and application programming interface.