Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange, and Natixis Investment Managers have announced a Series A investment in FundsDLT to develop a novel decentralized technology platform to facilitate the distribution of funds based on distributed ledger technology (DLT). This move marks a major milestone in the evolution of FundsDLT, originally initiated and incubated by the Luxembourg Stock Exchange and its affiliate Fundsquare. Financial details were not announced.
The Series A funding will strengthen the FundsDLT platform and accelerate its commercial development. “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, in a statement.
FundsDLT is expected to streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The model is applicable to a wide range of funds and does not depend on the jurisdiction. It is built using permissioned blockchain technology based on Ethereum that ensures privacy and high performance, and enables the reengineering of the fund distribution value chain, from front to back, covering the entire fund lifecycle.
The platform allows asset managers, distributors, asset servicers, and the entire supply chain to reduce costs by removing redundant activities, while providing the opportunity to achieve necessary transparency on end investors and creating the foundation for digital fund distribution.
Joseph Pinto, chief global operating officer of Natixis Investment Managers, said in a statement: “The digital transformation poses some of the greatest challenges and opportunities for the investment management industry today, and blockchain can play an important role. We believe it is critical for the investment management industry to increase transparency and improve operations rapidly. FundsDLT will help us achieve these objectives and will, in turn, allow us to provide an enhanced experience for investors by leveraging blockchain technology.”
Philippe Seyll, CEO of Clearstream Banking in Luxembourg, said in a statement: “FundsDLT is an international initiative that streamlines a number of activities along the fund distribution value chain and has the potential to reduce costs for the benefit of investors across fund and investor domiciles.”
Michel Degen, head of Credit Suisse Asset Management Switzerland and EMEA, said in a statement: “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.”