Brian McNulty, a former R3 managing
director who left the company in January, has emerged from the bushes
with a blockchain project to streamline the fund management industry.
Revealed exclusively to CoinDesk,
FundAdminChain (FAC), which is helmed by McNulty, also boasts R3 CEO
David Rutter as an advisor, as well as buy-side veterans Peter Townsend
and Mark Harrison, both formerly of BNP Paribas.
Built on R3’s Corda platform, FAC
aims to bring the distributors, transfer agents, custodians and other
intermediaries involved in the buying and selling of units in a fund
onto a distributed ledger. The blockchain is targeting transfer agencies
and messaging, to begin with, and then aims to build out into asset
services.
The size of this industry is about $100 trillion globally, according
to FAC’s pitch deck; the London-based firm is starting with the
comparatively modest goal of capturing 1.5 percent of the U.K. market’s
$8.5 trillion in assets under management (AUM) in Year One.
A distributed ledger aimed at the
funds space had been on McNulty’s mind for some time, he said, and he
honed the idea during his time as global head of services at R3. As
such, he’s in no doubt about the choice of platform.
McNulty told CoinDesk:
“R3 is keen to fuel
companies like us and we couldn’t do this without them. You could say
I’ve drunk the Kool-Aid, but to be honest I’d only do this on Corda.
It’s the only one that’s fit for purpose. And having been in there for
three years, I can see how we can work with some of the other builders
of solutions.”
Millions in savings
The potential savings from the
technology are “exciting,” according to McNulty. FAC will charge fund
managers 0.5 basis points for the registry, depository and transaction
functions, compared to 5 basis points on average incumbents charge for
the same services, he said.
Using FAC can save fund managers a
minimum £30 million per year, per each jurisdiction where a fund is
domiciled, for every £100 billion assets under management, McNulty
claimed.
The minimum viable product is out the
gates, McNulty said with 25 fund managers looking at it. He said FAC is
expecting to do a raise at the tail end of this year and live
production is slated for June 2020.
McNulty joined R3 in March 2016
having previously founded the PTDL (Post Trade Distributed Ledger)
Group, a blockchain consortium which numbered around 40 members
including CME Group, State Street and the London Stock Exchange.
His job at R3 was eliminated as part of an internal reorganization there, but it appears there are no hard feelings.
FAC will be built using the full
commercial version of Corda as opposed to being an open-source
“CorDapp.” As such, the Corda licensing will be wrapped in the license
for FAC, said McNulty, adding:
“Most things that are
going to go into production in banks probably need the enterprise
[Corda]. So I am building on an enterprise version from the outset
because I know that’s where we’ll end up.”
source link
