Chicago-headquartered Northern Trust is set to transfer its distributed ledger technology (DLT) platform for private equity asset servicing to Broadridge Financial Solutions.
Following the agreement, Broadridge will develop the platform leveraging blockchain technology created by Northern Trust.
The technology will provide data and analytics tools connecting the private equity lifecycle “for all market participants”, once the platform has been built out, according to Broadridge.
Using blockchain, the platform will enable private equity firms to manage, communicate, and engage with investors, whilst enhancing capital and cash flow management. It also automates the middle office functions for private equity.
Technology provider Broadridge was chosen because of its “deep FinTech expertise”, according to Pete Cherecwich, Northern Trust’s president of corporate and institutional services.
“The platform delivers real-time insight and transparency to all parties, including fund managers, investors and auditors, and enables regulatory access when required.”
It paves the way for the digitisation of the private equity asset class, he said.
The alternatives and private equity marketplace is growing rapidly, according to Broadridge’s head of asset management solutions Eric Bernstein. “The technology needs of this evolving marketplace are underserved,” he said.
The blockchain solution will initially be made available to all private equity funds domiciled in Guernsey and Delaware, including those administered by Northern Trust.
Plans are already in the pipeline to further develop and expand the private equity solution.
“With a focus on increasing efficiency in the market and providing real business value to clients, this blockchain solution has the potential to benefit the financial services industry by improving transparency, streamlining business processes, eliminating manual reconciliations, and reducing costs,” said Broadridge.
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