Luxembourg-based FundsDLT is to take its blockchain-powered fund distribution capability to an industrial scale following the integration into the fund services business of Clearstream, a provider of post-trade market infrastructure.
Deutsche Borse Group, the market infrastructure operator which owns Clearstream, has bought up remaining shares in FundsDLT following several years as a minority shareholder, during which time it worked with asset managers to test the viability of blockchain as a means of fund distribution.
Deutsche Borse acquired all outstanding shares of FundsDLT through a corporate venture capital arm called DB1 Ventures. The amount was not disclosed.
The deal will make FundsDLT technology and services an “integral part of Clearstream’s fund service offering. This step will enable the technology to move to a more industrial scale, complementing and strengthening Clearstream’s current fund processing and distribution offering”, the firms said.
FundsDLT operates a decentralised platform based on distributed ledger technology for “end-to-end fund distribution and processing”.
Deutsche Borse’s involvement in FundsDLT, via Clearstream, dates back to at least March 2020 when the firms joined forces with the Luxembourg Stock Exchange, Credit Suisse Asset Management (CSAM) and Natixis Investment Managers to invest in and develop FundsDLT as the “first” platform to carry out fund subscriptions on blockchain infrastructure.
CSAM and Natixis IM also became clients of FundsDLT and remain so, along with UBS Asset Management, following the acquisition, which is still subject to regulatory approval.
“FundsDLT has successfully demonstrated the advantages of a blockchain-based distribution model for investment funds in several locations across Europe and Asia and is established as a leading solution for digital cross-border distribution,” the firms said.
Philippe Seyll, CEO of Clearstream Fund Centre, said the acquisition would “redefine the overall distribution chain of the fund business”.
He added: “It enriches distribution capabilities, is streamlining operations and bringing asset managers closer to retail clients through blockchain. We will see measurable benefits for market participants, including faster time to market and cheaper access to funds.”
Olivier Portenseigne, CEO of FundsDLT, said the firm and Clearstream were committed to a “new generation of market infrastructure”.
“Our goal is to enable fund distributors and asset managers – thanks to blockchain and fund tokenisation – to simplify their business and operating model and roll out the technology foundation to enable their clients to connect to fund products anywhere, in an easier and in a more cost-effective manner.”
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