Schroders is developing a tokenised digital asset fund with the Monetary Authority of Singapore (MAS) to explore the capabilities of blockchain to personalise investments and simplify operations.
The UK-based asset manager is participating in the MAS Project Guardian, a “ground-breaking initiative” to develop a digital asset ecosystem.
A tokenised investment vehicle tokenises traditional assets, and this latest project comes four months after Schroders participated in the first-ever GBP Digital Bond issued by the European Investment Bank in February.
Schroders says MAS's Project Guardian aims to support global efforts in testing the feasibility of tokenised assets while “managing risks to financial stability and integrity”.
The asset manager is collaborating also with fund tech firm Calastone, which manages a global funds network, to explore the capabilities of a tokenised vehicle for Variable Capital Companies – a common fund structure in Singapore.
The project will potentially allow clients to improve the personalisation of their investments, while the underlying blockchain technology could simplify day-to-day operational processing through increased automation and synchronised data, Schroders said.
The collaboration between Schroders and Calastone will also explore asset ownership linked to blockchain technology that could provide more cost-efficient investment allocation for retail and institutional investors.
Peter Hilborne, chief operating officer, operations, at Schroders, said distributed ledger technology (DLT) would “redefine finance with a positive impact on asset management”.
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Marita McGinley, head of digital assets strategy at Schroders, said: “Tokenisation brings forth two fundamental advantages: synchronised data and heightened automation. Moreover, it expands accessibility and enables customisation, providing investors with more options. Managed in a responsible way, we think this is good for clients and for the market.”
Adam Belding, chief technology officer at Calastone, said Calastone has worked on DLT as an enabler for many years and that it was exciting to work with a “visionary asset manager like Schroders” to enable transformation in the investment industry.
Other digital initiatives at Schroders include in August 2022, when the firm announced a strategic minority stake in Forteus, an asset manager focused on blockchain and digital assets, to support ongoing education and research in this sector.
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