Calastone, Schroders collab on tokenisation

Yasmine Raso

Senior Journalist, Financial Newswire

28 June 2023

Global funds management solutions provider, Calastone, and global asset manager, Schroders, have forged a partnership to develop a tokenised investment vehicle project for variable capital companies (VCCs).

The announcement aligns with Calastone’s recent multi-year investment in distributed ledger technology (DLT) and tokenisation, and follows a recent whitepaper detailing a future where funds function in a digital environment and assets are traded as tokens.

The whitepaper also found that 97 per cent of institutional investor survey respondents agreed that tokenisation will revolutionise asset management, achieved by removing friction from asset transfers (84 per cent) and improving access for a broader range of investors (86 per cent). Just over 50 per cent of survey participants said they currently invest in or are exploring tokenised securities.

“We’ve been working with DLT for many years, exploring different types of DLT and looking for the use cases where it can add real value,” Adam Belding, CTO at Calastone, said.

“Tokenising fund units will not provide the transformation that the industry is looking for, however operating collective investments on a native DLT platform, and applying DLT and tokenisation at all levels of the fund from trading, to administration and distribution, provides a much more fundamental transformation.

“Our work with Schroders shows that this future could be much closer than some imagine. We believe that used in the right way DLT is a powerful platform for providing, managing, securing and distributing tokenised assets, helping to unlock meaningful improvements in operational efficiency and product innovation.”

Calastone also highlighted its ultimate goal was to craft and distribute tokenised investment vehicles through its Distributed Market Infrastructure. Schroders’ support will enable the digitalisation of these investments to offer better value for investors by decreasing costs and creating more flexible products that reflect the growing prevalence of other digital experiences.

“We are in a transformative era where distributed ledger technology will redefine finance with a positive impact on asset management,” Peter Hilborne, Chief Operating Officer, Operations at Schroders, said.

“At Schroders, we understand the vital role tokenisation and digital assets may play in modern economic arrangements, and we are delighted to be working with Calastone to contribute to the advancement of the digital asset ecosystem.

“We look forward to collaborating with various industry players to bring this pioneering technology to market, ushering in an era of exciting possibilities.”