The Kinexys Fund Flow solution from J.P. Morgan facilitated the tokenization operation.
J.P. Morgan Private Bank, J.P. Morgan Asset Management, and Citco have completed a first by processing a tokenized private equity fund via the Kinexys Fund Flow solution from the Kinexys blockchain business unit of J.P. Morgan, officials say.
The new solution “collects, harmonizes, and records investor register and transactional data” for the Kinexys Digital Assets (KDA) permissioned blockchain network, according to the announcement. The Kinexys Fund Flow handles the tokenization of the investor register and transactional data and facilitates near-instant settlement.
The fund flow solution also offers “granular transparency into investor, fund, and capital activity data,” and helps with the funding of capital calls and distributions because of the KDA platform.
This is intended to allow “fund managers, transfer agents and distributors” to access a shared “at-the-source” view of individual holdings and the real-time funding status of their capital calls or subscriptions, officials say. “Smart contracts and programmable payments provide an automated way to move cash from individual investor brokerage accounts at J.P. Morgan Private Bank to fund managers with full transparency, greater speed, and without the need to rely on wire services.”
Officials say the Kinexys Fund Flow is intended to streamline operations and automate capital activities and thus give J.P. Morgan Private Bank clients access to alternative investment strategies “without the cost of unnecessary feeder funds or compromises on an open-end versus closed-end fund structure,” officials say.
“Enabling real-time tri-party settlement between fund managers, transfer agents, and distributors will ultimately unlock new sources of liquidity and more flexible portfolio construction,” says Anton Pil, head of global alternative investment solutions for J.P. Morgan Asset Management, in a prepared statement.
The Kinexys Fund Flow solution “addresses the industry’s longstanding challenges of siloed data systems and manual reconciliations that have limited scalability. By leveraging blockchain technology and smart contracts, it improves the experience and outcomes for investors while significantly reducing operational inefficiencies,” says Albert Bauer, chief technology officer (CTO) for the Citco group of companies, in a statement.
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