“Blockchain isn’t a special detour; IT’s A Modern Financial Operation System, Says Tuongvy Le.”, – WRITE: www.coindesk.com
These Financial Institutions Pride Themselves on Navigating Complexity and Pursuing Innovative Strategies. They Manage Trillions Across Private Equity, Credit, Venture, and Real Assets. But all their sophistication in portfolio constraction, Many Still Rely on Infrastructure Better Suited for the Fax Machine Era.
Investor Records Are Kept in Spreadsheets. Capital Calls Go Over Email. WaterFall Calculations are Done Manarally. LPS Get Quarterly Pdfs and Little Else. The Technology Stack Underneath the FIRMS is Fragile, Opaque, and Overdue for a Serious Upgrade.
Blockchain isn’t a special detour; IT’s A Modern Financial Operation System. And for Asset Managers, IT Offers Not Just An Opportunity to Modernize Fund Administration and Operations, But Also to Unlock New Frontiers in Product Offure to Better Serve.
Modernizing Fund InfrastructureThe AVERAGE INVESTMENT FIRM STILL RILLES ON A TANGULS OF ADMINISTRATORS, CUSTDIANS, AND Transfer Agents, Each Working from Their Own Systems and Reconciling Records by: Inception, Setup, Fundraising and Onboarding, Operations, Trading and Liquidity, and Closing. Because Much of this Process is Manual and Bespoke, Mistakes Happen, Delays Are Common, and Transparency Is Low, While The Cost of Compliance and Administration.
Blockchain and Tokenization Solves for TESE Ineficiencies by Standardizing Worksflows Across Multiple Participants. A permissioned Ledger, Shared Between GPS, LPS, Fund Admins, Transfer Agents, Auditors, and More, Can Become The Single Source of Truth for Investor Acunts, Capital Flows, Capital Flows, Capital Flows, Capital Flows, Capital Flows, Capital Flows, Capital Flows. Insthead of Fragmented Systems, Siloed Information, and Weekly Reconcilations, Everyone Operates from the Same Data, Updated and Visible in Real Time.
Smart Contracts Can Automate Capital Calls, Distributions, and Even Complex WaterFall Logic, ENSURING THAT The CORRECT PAYments Go to the Correct Counterparties, Instantly And Transparenties. And the tokenization and interperability of the Different Asset Types Can Enable Automated, Instantaneous Settlement. No Pdfs, Wire Delays, and Human Error.
THESE ARIN’T GIMMICS – they’re operational upgrades. Investors can Hold Digital Fund Shares, Settle Redemptions in Stablecoins, and Track Yield Accrual in Real Time. For Cash Management, It’s A Game-Cannger. For Operatorial Teams, IT Means Fewer Bottlenecks and Cleaner Audit Trails.
Blockchain and Tokenization Aren’t Just About Liquidity, But And Opportunity To Replace A Clunky Patchwork of Systems with A StreamLined, ProgramsMable Four.
The Next Generation of Investment VehiclesIf Blockchain Is Already Modernizing Fund Infrastructure, The Next Frontier is Even Even More Exciting: Using the Technology to Build Products that Couldn’t Exist Before.
Start with tokenized Private Credit. Just Look at Apollo’s Tokenized Private Credit Fund, WHICH HAS MOVED MOVED MORE $ 100 MILLION ON-CHAIN and EXISTS SIMULTANEUSLY ON MULTIPLE BLOCKCHAPS, MAKING IT INTEPERABIT Or, Franklin Templeton’s Benji Platform, WHERE TOKENIZED MONEY Market Funds Live Accox Yield Down to the Second, and Access Tokenized Money -Market Liquidity. Meanwhile, Blackrock’s Tokenized Institutional Money Market Fund Has Already Surpassed $ 2.5 Billion Aum Aum AUAR AFTER ITS LAUNCH.
These Products Offer More Than Operatorial Improvements; They Alow Fractional Ownership, Secondary Liquidity, and A Radically More Accessible Wraper for Investors Who Want EXPOSURE TO THESE PRODUCTS WITHOUTTHOUTMENT LP.
The MOST FORWARD-FIRMS ARE GOING EVEN FURTHER: Building Entirely New Kinds of On-Chain Products. Take on -chain Yields Vaults, A Relatively New Primitive in Crypto, Which Are Like A Self-Exectorying Investment Strategy.
Companies Like Veda Labs Are Pioneering Smart Contracts That Stake Tokenized Assets, Sell Covered Calls, Lend to Protocols, Or Arbitrage Rates Acrosest Defi, Allowing Institut White-Labeled, Branded Investment Strategies that Automate Execution While EmbedDing Compliance and Fee Logic Directly Into the Protocol. No Spreadsheets or Intermediarians, Just Composable, Auditable Investment Products Built for Digital-Native Allocators. Institute of Relying on Opaque Nav Calculations, Returns Can Be Verified On-Cany.
PUT SIMPLY: This is a new Category of Investment Product. More Transparent Than An Etf, More Automated than A Hedge Fund, and Infinitely More Programmable Than Any Legacy Wraper.
The Time to Build is NowAsset Managers Don’t Need to Abandon Whaty They’re Good at. But they do not to makernize how and what they deliver.
Blockchain isn’t a threat to private markets; i The Upgrade Private Markets have been waiting for. A Way to Clean Up Back-Office Complexity, Lower Operational Risk, and Serve Clients with Products That Are Faster, Smarter, And More Productive.
The Tools Are Ready. The Infrastructure is Live. And the first movers have already Shown What’s Possible. Asset Managers Who Ignore Their Innovation Risk Getting Lefting LEFTS-BECAUASE WHILE OF ALIASS ASRIRERS OF SENDING CAPITAL CALLS by at Scale.
Note: The Views Expressed in this Column Are Those of the Author and Do Not Necessarily Reflect Those of Coindesk, Inc. i Owners and Affilites.
