Welcome back to Digital Wealth, the weekly news aggregator for digital investing, asset management, and wealthtech. Avert your gaze from the fire that is FTX and settle into some easy enterprise fintech.
Today we highlight the following news —
NORTH AMERICA:Envestnet Rolls Out Enhancements Across Its Ecosystem, Giving Advisors Greater Visibility Into Clients' Finances
EMEA: Moonfare Expands To Offer Investment Platform For Family Offices
ASIA PACIFIC: First Industry Pilot For Digital Assets Goes Live via Monetary Authority of Singapore, with JPM and DBS
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Envestnet, a leading provider of wealth tech to RIAs and broker dealers serving 100,000+ advisors, announced a series of platform enhancements here.
On the wealthtech side, Envestnet's RIA platform now integrates with the Envestnet Credit Exchange, powered by the Advisor Credit Exchange (ACx), which adds lending choices to investment management product. Advisors using Tamarac can introduce clients to firms offering financing for residential real estate, unsecured "signature", and non-purpose securities-backed loans.
Also, Tamarac now integrates digital assets — a big deal, likely to keep up with Fidelity offering direct crypto trading — including performance reporting and billing. Flourish Crypto and Gemini's BITRIA wealth management platform (recently acquired) were plugged into Tamarac to support this.
Further, Envestnet added two Fixed Income Quantitative Portfolios — "Corporate Bond Ladder" and "Municipal Bond Ladder" — designed to provide yield income in the current environment. This is delicious. On the data and analytics side, Envestnet launched a cloud-based wealth data platform, powered by data cloud company Snowflake. Customers can pull in outside data sets into the wealth data platform and combine, normalize, and supplement those data sets with others on the Envestnet platform.
Last, ENV just announced a partnership with FNZ, another wealthtech with $1.5T in assets under administration and 20MM+ clients. The partnership will enable insights generated by Envestnet to appear in FNZ's platform and be distributed to its global customer base. The two will enter the RIA custody business with FNZ next year — why be multi-custody when you can be closed custody?
The firm prints $1.2B in revenue per year, has a massive data pipe in the form of Yodlee, and trades at around $2.9B per year. Something doesn’t quite compute.
Moonfare, a B2C digital platform for HNWIs, is expanding its current capabilities and entering the family office space. The company has launched in the UAE and India, and is available in 25 countries. The new positioning shows a desire to tap into the $6-7T AUM family office industry.
In recent weeks, we’ve covered several stories about Alternatives distribution, showing that demand for the asset class is growing and that platforms are getting more creative in their product offerings (e.g., reAlpha story) to adjust. According to research firm Cerulli, Americans are expected to inherit $70T in assets by 2045, of which almost half of all US wealth will come from the top 1.5% of households. The magnitude of this wealth transfer and its impact on family offices is significant, in the sense that they must digitize to retain high end clients.
Companies like Moonfare are then focused on digital access to private equity, and modern interfaces for holding that exposure. Investment minimums are $75k, but come with the lower liquidity profile of PE funds. That may be preferable as a diversification against the insane volatility we see in the public markets, equity and otherwise. It is notable to us that this trend is not restricted only to the West.
The Monetary Authority of Singapore (MAS) announced the first industry pilot under MAS' Project Guardian, which tests the feasibility of applications in asset tokenization and DeFi. A number of key banks were involved in moving around diital financial instruments.
The MAS hopes to (1) explore the use of public blockchains to build interoperable networks that enable digital asset trading across platforms and liquidity pools; (2) establish an environment for executing DeFi protocols through a standard trust layer of independent actors, i.e., regulated financial institutions that screen, verify and issue verifiable credentials to entities that wish to participate in DeFi protocols; (3) examine the representation of securities in the form of tokenized assets; and (4) study regulatory safeguards and controls for DeFi protocols and examine the use of smart contract auditing capabilities.
Under the first industry pilot, DBS Bank, JP Morgan and SBI Digital Asset Holdings conducted transactions for tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD). According to the results, cross-currency transactions of tokenized assets can be traded, cleared, and settled instantaneously among direct participants.
The MAS is launching two following industry pilots: (1) Trade Finance, in which Standard Chartered Bank explores the issuance of tokens linked to trade assets, and 2) Wealth Management, in which HSBC, UOB, and Marketnode are building an end-to-end, issuance-to-distribution distributed ledger technology (DLT)-enabled wealth management infrastructure platform. The MAS hopes the platform will halve the time to manufacture and distribute products and funds, lower issuance and servicing costs, and enhance product accessibility and transparency.
On the public crypto licensing front, the MAS currently has a stringent licensing process for crypto-related services. That is different from the pilots described above, which are meant to elevate regulated, enterprise blockchains. A regulator can dream!
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