JPMorgan has rolled out a private fund tokenised solution on its blockchain business unit Kynexys.

The Kynexys Fund Flow solution aims to simplify access to alternative investments, including private equity, hedge funds, and private credit by using blockchain technology to automate tasks such as fund subscriptions, redemptions, transfers and recordkeeping.

The service enables JPMorgan Private Bank clients to access world-class alternative investment strategies avoiding the extra costs of feeder funds.

It aims to offer an automated way to transfer money from individual investors' brokerage accounts at JPMorgan Private Bank to fund managers, offering “transparency and speed” without the need for wire transfer services.

The tokenisation of the investor register and transactional data is also designed to enable near-instant settlement.

“Fund managers, transfer agents and distributors maintain a shared ‘at source’ view of individual holdings, as well as the real-time funding status of their capital calls or subscriptions,” the firm said.

The move comes as JPMorgan says that traditional payment systems and manual reconciliations are currently limiting private markets’ scalability, with the firm stressing tokenisation could save thousands of hours and limit errors and inefficiencies.

JPMorgan Wealth Management and fund administrator Citco have already completed the first private equity transaction using the solution.

Jed Laskowitz, global head of private markets and customised solutions at JPMorgan Asset Management, said that widespread adoption of the solution is expected early next year.

He added: “By streamlining operations and automating capital activities, JPMorgan Asset Management is delivering greater efficiency and real-time transparency —creating a more connected investment experience for our clients.”

Anton Pil, head of global alternative investment solutions for JPMorgan Asset Management, stressed that the new solution aims to transform the way clients allocate and manage private fund portfolios.

“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,” he added.

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