January 12, 2023
The digital trading of private market assets requires servicing of those assets in such a manner that they can be understood (surveillance – pre trade and post trade), valued, and traded. I suggest we break this into three distinct components – 1) Asset Lifecycle, 2) Reporting/Risk/Ratings, and 3) Fund Lifecycle. When we have good asset data, reporting, and fund level data on alternative funds entire new front office solutions, i.e. forms of securitization, lending, trading, indexing, hedging will be created along with new, novel forms of distribution. We see the first large adoption as (interval/closed end/open ended) alternative funds being traded globally in a tokenized form. We need to break down the services needed to deliver these functions and drive the correct data to these compute functions that will exist using legacy systems and on chain smart contracts and delivered real time to investors and marketplaces.
In order to service these assets we need to capture data around these assets, process the data around these assets, deliver structured data to the computational tools on demand, and make that output both accessible and have mechanisms to trust that data. Doing this on a one off basis is not difficult, doing this at scale is a challenge.
The largest obstacle to this is a desire to have a single centralized data base as a source for these functions.
We create and consume data at an ever increasing scale, and maintaining a correct copy in the format that the centralized data base is not possible and not believable by investors.
Credentialing data at the edge, at the place of rest of the data with the ability to prove origin, and provide audit-ability over time of the data that drove any unique calculation is what will drive a federated data architecture. Using Inveniam,io as an operating system for data will drive automation and digitization of alternatives delivering this proof of origin, proof of process, and automation of delivery to computational tools.
Incomplete data, lagging data does not just destroy value, it steals value and delivers it to the person with the better data. Delivering structured data on demand to computational systems in a decentralized data environment is what Inveniam does through the asset lifecycle, into reporting tools like eFront, and for the fund administration itself. Cushman & Wakefield, JLL, CBRE, Colliers, and Deloitte valuing assets using Inveniam utilizing tools like Argus, at the asset level, and Apex Group Ltd is then able to deliver a digital middle office using Inveniam to power their calculation, risk, and reporting tools. This happens at scale in a decentralized data environment, to prove the state of an asset, so you can value an asset, so you can trade the asset, on demand. More coming on each component.