Worldwide first fund transaction using blockchain technology completed in Luxembourg
Natixis Asset Management has announced that investors have successfully purchased shares in its funds through FundsDLT, the Luxembourg blockchain-powered fund distribution platform for fund managers. This is the first real blockchain transaction in the global investment fund industry.
The asset manager, based in Luxembourg and a leading affiliate of Natixis Global Aasset Management, announced its intention to be the first asset management player in the industry to use the FundsDLT platform applying blockchain technology across several of its business lines. For the first time in the fund industry, investors are using a blockchain based platform to purchase real funds’ shares with real cash.
FundsDLT is the result of collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg. The successful transaction is a significant milestone for Luxembourg’s FinTech environment and its investment fund industry.
The new distribution platform is being developed to enable asset managers to sell funds through a new distribution channel, while significantly reducing administration costs and the time to process transactions for both asset managers and other asset services FundsDLT will streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The model is applicable to a wide range of funds and does not depend on the jurisdiction. With the successful completion of the first transactions, the team is looking to investigate other use cases and applications in the field of B2B and B2B2C.
Olivier Portenseigne, Managing Director of Fundsquare said: "We are proud to have run the first real blockchain transactions in the history of investment funds. It was important for us to demonstrate that FundsDLT works in order to create the necessary trust that blockchain will answer the current needs of the asset management industry in terms of operational efficiency and digitalization. This will give our customers easy access to a powerful new generation of services.”
Matthieu Duncan, CEO of Natixis Asset Management, added that Natixis "is delighted to have contributed to this pioneering first blockchain enabled trade via the FundsDLT platform. We believe the potential for blockchain technology to enhance distribution mechanisms in the asset management industry is very significant.”
Ranked as the leading investment fund centre in Europe and second in the world, Luxembourg is positioning itself as a key hub in financial technology, notably offering asset managers access to new services and helping the industry adapt to rapid digitalisation. In order to further develop the Luxembourg fintech ecosystem and cement the country’s role as a hub for global fintech companies wishing to access European markets, Luxembourg recently launched the Luxembourg House of Financial Technology (LHoFT), a private-public initiative driving technology innovation in financial services, offering incubation and acting as a soft-landing platform for FinTech start-ups looking to launch their activities in Luxembourg and beyond.