How Blockchain Technology Can Streamline an Investment Value Chain

The investment value chain has long been cluttered with intermediaries, dampening returns for investors and fostering inefficiencies and opacity within the financial sector. However, the rapid evolution of technology, particularly in real estate finance and wealth management, presents an opportunity for transformation. 

The real estate investment journey involves directing individual savings into tangible assets, mainly properties, with the goal of nurturing long-term value and delivering returns. This intricate process, known as the value chain, stands to significantly benefit from technological innovations as we endeavor to construct a seamlessly integrated investing platform.

The real estate investing value chain comprises three pivotal steps:

- Aggregation consolidates individual savings from various sources such as pensions, endowments, or investment advisors, creating pooled funds for generating returns.

- Origination involves investment managers procuring capital from aggregators to fund specific strategies, collaborating with on-ground operators for execution.

- Execution entails implementing strategies through operating partners like real estate firms.

Blockchain for the Value Chain

Although intermediaries such as brokers, lawyers and banks have historically played essential roles in the real estate ecosystem, emerging technologies – particularly blockchain, digitized legal contracts, open banking and e-money infrastructure – have the potential to streamline these functions, empowering clients to maximize investments by reducing fees and enhancing efficiency.

Mark Templeman: “Immutability, security, efficiency and traceability.”

ASK Partners is pioneering a drive towards enhanced returns, direct investment visibility and increased liquidity for investors, with a digital platform that consolidates various aspects of the value chain, offering a hassle-free solution for private clients.

Users are provided with real-time portfolio views, as the platform employs a sophisticated algorithm to calculate interest across multiple product types.

This is being further developed using blockchain ledger technology to augment this process, providing benefits such as immutability, security, efficiency and traceability. The latter is vital for automated solutions in the secondary market and operations, enhancing accessibility and transparency.

Tokenization and Standardization

Access is another key point. Historically, the layers have meant only large institutional transactions took place to provide the necessary funding to property entrepreneurs; effectively pooling money into large funds and then allocating out these funds into various investments. 

ASK’s model effectively tokenizes property assets through a decentralized model, much like other blockchain tokenized assets, which provides the end investor direct access to the underlying asset and ability to trade it on a secondary market.

ASK works closely with legal experts to simplify complex documentation requirements, converting customized forms into standardized documents for user convenience. This simplification enhances document access and signing processes.

Furthermore, the platform facilitates money transfers, eliminating the traditional slow and expensive processes associated with alternative asset investing. Integration with e-money infrastructure and open banking expedites payments and automates operational tasks, replacing the traditional, operationally intensive banking model run on legacy technology which only increases the cost for the investor.

Reshaping a Market

While transparency has always been crucial, inefficiencies have historically obscured portfolio compositions and fee structures. Our streamlined value chain provides clearer visibility, offering investors comprehensive details on fees and portfolios. In response to user feedback, we continually improve our platform to deliver the necessary metrics and data for effective investment management.

The use of blockchain technologies allows us to efficiently process transactions, and integration with open banking and e-money infrastructures eliminates operational inefficiencies. This digital transformation, combined with user-friendly access, significantly improves the overall value chain.

Innovation and integration are vital for industry disruption and challenging established entities. ASK’s investment in technology aims to reshape the market, replacing traditional fund managers and operators, and fostering evolution in property finance and private investment sectors.

Mark Templeman is chief technology officer of ASK Partners, a specialist, independent property lender in London, established by an experienced team of three partners in 2016 to provide bespoke and flexible real estate finance solutions. They have lent in excess of £1.45 billion across more than 110 transactions, each underwritten by ASK.