LSEG & Microsoft launch blockchain platform to boost private funds
London Stock Exchange Group has launched a blockchain-based Digital Markets Infrastructure platform, collaborating with Microsoft to deliver efficiency gains for private funds across the asset lifecycle.
The new Digital Markets Infrastructure (DMI) aims to enhance processes from issuance and tokenisation through to distribution, settlement, and ongoing servicing for a variety of asset classes, beginning with private funds. The platform is designed to be interoperable with both traditional and distributed ledger technologies, leveraging systems and services across LSEG's portfolio, including Workspace.
DMI has been developed using Microsoft Azure to bolster its scalability and resilience, with both LSEG and Microsoft planning to continue efforts to further develop and expand the platform. The open and interoperable approach intends to bring together participants from the global market to improve distribution, increase liquidity, and provide asset servicing in a regulated environment.
The initial implementation will allow private funds on the DMI platform to be accessible to Workspace users, facilitating interaction between General Partners and a wide network of professional investors. This is expected to make new private market investment opportunities more widely visible and accessible than before.
First transactions
The early phase of DMI's launch saw MembersCap and Archax onboarded as its first clients. The platform's first transaction has been completed, with MembersCap, serving as General Partner of MCM Fund 1, executing a primary fundraise in which Archax acted as nominee for a major Web3 foundation. EJF Capital has also joined as an early adopter, with selected funds set to be available on the platform in the near future.
Dr. Darko Hajdukovic, Head of Digital Markets Infrastructure at LSEG, highlighted the existing inefficiencies in private markets and outlined the group's commitment to enhancing access:
"There are many processes in private markets today that can be improved. At LSEG we are committed to significantly improving access to private markets, by streamlining workflows, enhancing distribution, and enabling liquidity. We intend to do this by continually working with all stakeholders to enhance efficiencies and connectivity for both digitally-native and traditional assets. The onboarding of our first clients and this first transaction are significant milestones, demonstrating the appetite for an end-to-end, interoperable, regulated financial markets DLT infrastructure. LSEG's position as a convener of markets can bring significant scale to digital assets and effect real change."
Bill Borden, Corporate Vice President, Worldwide Financial Services at Microsoft, commented on the technology partnership and its role in driving financial sector change:
"Microsoft's collaboration with LSEG on its Digital Markets Infrastructure (DMI) is a powerful example of the innovation driving our strategic partnership. Together, we're reshaping the future of global finance to empower our customers to unlock new opportunities and drive meaningful change."
Next steps
LSEG has indicated that after the initial focus on private funds, additional asset classes will be incorporated into DMI over time. The platform's design is intended to support customer needs across the funding continuum and is positioned as a component of a broader set of group initiatives, including the Private Securities Market.
DMI is structured to encourage collaboration within the financial markets ecosystem, supporting interoperability between existing and emerging technologies, and maintaining regulatory compliance in serviced asset transactions.
The onboarding of initial clients and completion of the first transaction are viewed by LSEG as significant steps in expanding digital market operations and increasing participation in digital private markets.