Finance Monthly March 2020 Edition

THE IMPACT OF BLOCKCHAIN ON THE FUNCTIONING OF REAL ESTATE FUNDS David Poupardin - ConsenSys Better distribution of fund shares Currently, the distribution of shares in a real estate fund when it is created is fairly complex. Infrastructures exist, but do not allow real estate fund management companies to distribute their shares abroad easily. There are several distribution channels that make international distribution difficult. Blockchain - by virtue of its construction and its method of record-keeping - enables asset managers to get around these market infrastructure issues and distribute internationally more easily. By using such solutions, a real estate fund management company will be able to better manage the relationship with investors or distributors and reduce costs linked to the management of liabilities through automation. While blockchain platforms could improve themanagement of the relationship between the real estate fund management company and its investors, it also guarantees more reliable access to the characteristics of the fund, as well as to the data which serves as the basis for the valuation of the assets. For example, cash flows from a building can be entered on the blockchain, which then becomes a reliable and dynamic source enabling the performance of an asset to be measured more regularly. We often hear about the tokenisation of real estate funds by the amount tokenised (theoretically enabling investors to buy for £1 of fund unit), or through a number of myths circulating about blockchain which would allow the sale of fund shares over-the-counter and globally. Without going so far as to exchange shares from one end of the world to the other, blockchain technology is already bringing real improvements to the traditional operation of real estate funds. Blockchain not only allows better distribution of fund shares when it is created but also facilitates trading over-the-counter in a secondary market. In this article, David Poupardin discusses the impact of blockchain on the back and middle offices of real estate funds. INVESTMENT - BLOCKCHAIN 50 www.finance-monthly.com