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Financial services giant Northern Trust has entered into an agreement with Broadridge Financial Solutions to transfer its distributed ledger technology (DLT) platform for private equity (PE) asset servicing.
Northern Trust launched the first commercial deployment of the Hyperledger Fabric-based blockchain solution at Swiss asset management firm Unigestion in 2017. The objective was to provide real-time insight and transparency to all parties, including the fund managers and investors as well as allowing regulatory access when required.
In April, Northern Trust added the capability to deploy legal clauses as smart contracts directly from a digital legal agreement onto its private equity blockchain.
Commenting on the decision to transfer its distributed ledger technology to Broadridge, Pete Cherecwich, President of Corporate & Institutional Services, Northern Trust, said:
“For the benefit of our clients and the industry as a whole, it’s now time to hand over the reins to a technology provider with deep FinTech expertise. Broadridge’s administrator-agnostic position, coupled with its DLT leadership and global footprint, make them an ideal firm to open up this innovative technology to the marketplace, paving the way for the digitization of the asset class.”
According to the latest press release, Broadridge will build out the platform leveraging Northern Trust’s DLT to serve all PE market participants.
The technology will provide data and analytics tools which will connect the complex PE lifecycle for all market participants. The platform will enable PE firms to manage, communicate and engage with investors with greater efficiency. It will help enhance the management of capital and cash flow and automate the middle office functions for PE.
“The alternatives/PE marketplace is expanding rapidly, and the technology needs of this evolving marketplace are underserved,” said Eric Bernstein, Broadridge’s head of asset management solutions. “Broadridge’s unique position as a network enabler, and successful record in utilizing blockchain technology, will allow us to help transform the private equity industry.”
The solution will be initially available to all PE funds domiciled in Guernsey and Delaware.
Broadridge plans to further develop and expand the solution to deliver new capabilities across the lifecycle. The solution has the potential to “benefit the financial services industry by improving transparency, streamlining business processes, eliminating manual reconciliations, and reducing costs,” the release said.
