Northern Trust has processed the first live capital call using distributed ledger technology for Emerald Cleantech Fund III, adding a significant new capability to its blockchain solution for private equity fund administration.
The fully automated capital call administration functionality was deployed for Emerald Cleantech Fund III, a venture capital fund focused on technology companies. Investment advisor Emerald Technology Ventures utilised Northern Trust’s private equity blockchain for the fund’s capital call administration, endorsing Emerald’s commitment to technology leadership in alternative asset administration operations. The capital call, executed by Northern Trust and Emerald Cleantech Fund III, involved parties in the investment advisor’s office in Zurich, Switzerland; the Board of Directors; and PwC Channel Islands, the fund’s auditor, who performed the audit of the capital call. All parties connected through a distributed ledger based in Guernsey, operated by Northern Trust in its capacity as the fund’s administrator.
“Northern Trust has again broken new ground in the live application of blockchain technology in financial services,” says Pete Cherecwich, President of Corporate & Institutional Services at Northern Trust. “Working in partnership with key clients and regulators, we continue to deploy additional distributed ledger capabilities that drive efficiency and security across the spectrum of private equity lifecycle events. This is a further demonstration of how Northern Trust continues to lead the market with our innovation in technology.”
Northern Trust launched the first commercial blockchain solution for private equity fund administration in 2017 and won US patents in 2018 for Digital Identity Management and Digital Meeting Management, two critical elements of the move from manual to digital operations in private equity. Northern Trust also collaborated with major audit firms to develop direct access to fund data enabling real-time auditing of private equity lifecycle events.
“We are proud to participate in this milestone in the use of distributed ledger technology,” says Hans Dellenbach, Partner and CFO at Emerald Technology Ventures. “Northern Trust’s technology and operations teams have built an industrial strength, scalable and secure cloud application that is fully micro-service based and uses advanced event-based communications and application programming interface. Emerald is proud to be a first mover in using blockchain technology for fund administration and happy to see it deployed successfully on behalf of our innovative fund and investors.”
