Former R3 Director Plans to Take a Big Chunk of a $100 Trillion Market via FundAdminChain (FAC)
A former exec of the R3 blockchain firm who served as a managing director before leaving the firm earlier this year, Brian McNulty, has now announced a new blockchain platform headed by him, specifically focused on the fund management industry.
According to McNulty, the new platform called FundAdminChain (FAC) is well supported by some industry doyens including Pete Townshend and Mark Harrison who were both a part of BNP Paribas. The FAC also has as an advisor, the CEO of R3, David Nutter.
FAC is powered by R3’s Corda blockchain platform and it is precisely built as a platform for many industry players in the fund management industry for the trading of units in a fund which will be transparent on a distributed Ledger. The FAC will handle many different intercessors including transfer agents, custodians and distributors. The platform intends to kick-off with messaging and transfer agencies before it eventually starts to handle asset services.
Using Blockchain to Take Over the Fund Management Industry
The fund management industry is reportedly worth a whopping $100 trillion worldwide and the new blockchain project has in its sights, the possibility of winning over 1.5 percent of the market in the United Kingdom. The UK market is apparently worth around $8.5 trillion in assets under management (AUM).
According to McNulty, the idea of a blockchain project for the fund management industry is one that he has been working on for a long time and began to crystallize while he was still at R3 as the global head of services. This is probably one reason why the platform will be built on Corda.
He further spoke on his choice of using R3 saying that the firm is right because of the intricacies of their platform but also because R3 easily supports growing companies.
“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 [the] purpose and having been in there for three years, I can see how we can work with some of the other builders of solutions.”
He also added that:
“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.”
FAC is More Cost-Effective
McNulty has said that the new platform will be awesome for industry players as it promises the same services at more affordable rates. He said that fund managers are usually charged 5 basis points for different functions including registry and repository but FAC will only charge 0.5 basis points.
McNulty further asserts that any fund managers who use his FAC would be able to save at least £30 million annually per £100 billion assets under management in each jurisdiction where they have their funds.
At the moment, the new platform is being assessed by about 25 different fund managers and if everything goes well, McNulty is planning to raise funds before 2019 is over as the official unveiling is expected to start by June next year.
Before becoming a part of R3 in March 2016, McNulty started the Post Trade Distributed Ledger (PTDL) Group, a blockchain collective which had about 40 participants like the London Stock Exchange, the CME Group and the State Street Corporation. His departure from R3 seemed to have been initiated by the company itself but apparently, there's no bad blood especially since David Nutter, R3’s CEO is an advisor and FAC will be powered by Corda.