Northern Trust Corporation that provides wealth management, asset servicing, asset management and banking, has announced the launch of first commercial deployment of blockchain technology for private equity market, in collaboration with IBM and other stakeholders.

Northern Trust and IBM have built a blockchain solution that is rich in security and based on the Hyperledger Fabric. This solution addresses the lack of innovation in supporting private equities when investors are seeking greater transparency, security and efficiency.

The blockchain solution is available for use in order to manage the administration of a private equity fund that is managed by Unigestion, a Geneva, a Switzerland-based asset manager with $20 billion in assets under management.

“Current legal and administrative processes that support private equity are time consuming and expensive. A lack of transparency and efficient market practices leads to lengthy, duplicative and fragmented investment and administration processes. Northern Trust’s solution is designed to deliver a significantly enhanced and efficient approach to private equity administration,” Peter Cherecwich, president of Corporate & Institutional Services at Northern Trust, stated.

Along with Unigestion, Northern Trust has worked on to create an innovative private equity ecosystem that is designed to deliver an increased efficiency, security and transparency. This blockchain solution permits the funds to transfer the ownership stakes and be managed, serviced and audited throughout the investment lifecycle on a transparent platform. Northern Trust plans to initially make the solution available to clients on a selective basis.

The blockchain solution by Northern Trust and IBM not only uses open source Linux Foundation Hyperledger Fabric, but also IBM Blockchain’s high security business network with its hardware assisted cryptography and key management. This will enhance the safety and scalability of these transactions on the IBM Cloud for cloud-based application development.

“Blockchain is an ideal technology to bring innovation to the private equity market, allowing Northern Trust to improve traditional business processes at each stage to deliver greater transparency and efficiency. Based on the Hyperledger Fabric and secured by IBM Blockchain’s high security business network, IBM collaborated with Northern Trust to build a powerful new enterprise solution using blockchain for the private equity industry,” Arvind Krishna, Senior Vice President of Hybrid Cloud and Director of IBM Research said.

Northern Trust plans to explore and expand the blockchain solution into other asset classes and jurisdictions based on success in its initial platform.