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MONEY MANAGEMENT

Northern Trust, IBM create blockchain technology for private equity fund administration

Northern Trust and International Business Machines have collaborated to create blockchain technology that's being applied to private equity fund administration.

The distributed ledger technology is being used to administer a private equity fund managed by Unigestion, according to a news release from Northern Trust.

The technology is based on the open-source hyperledger fabric — blockchain technology that serves as a foundation to develop a variety of specific uses.

The Northern Trust-IBM application allows the Unigestion fund to transfer ownership stakes and be managed, serviced and audited transparently throughout the investment.

Northern Trust will be marketing the technology to its fund services clients on a selective basis, said Doug Holt, Northern Trust spokesman.

Mr. Holt said based on what Northern Trust has seen in the media, it's the first such application put in use for private equity fund administration. “This is our first solution in commercial use,” Mr. Holt said.

Laurence Leblond, head of operations at Unigestion, said the technology will allow the firm “to digitize board resolutions, calls and distributions to our investors, and in a longer term, calls and distributions from the funds we invest in. It will relieve the burden of data reconciliation, and various versions of documentation, as all is real time synchronized, and all the data is shared among the ecosystem.”