Revolutionizing Asset & Wealth Management
Onyx by J.P. Morgan (now Kinexys) and Apollo explore how tokenization can mass-scale the building and managing of investment portfolios across traditional and alternative assets
Read the report
Opportunity
Building and managing discretionary portfolios for individual investors is a highly profitable, $5.5Tn business1 enabling millions of investors to meet their financial goals. But existing infrastructure and processes make it difficult for wealth management firms to create innovative solutions, grow their businesses and realize further efficiencies.
In 2023, Onyx and Apollo collaborated under Project Guardian, an industry initiative led by the Monetary Authority of Singapore, to deliver a proof-of-concept using permissioned blockchain infrastructure to test how tokenization and smart contracts could create a step change in the asset management industry through a new paradigm for portfolio management.
Solution
By standardizing subscription and redemption processes, automating portfolio rebalancing, customizing portfolios efficiently at scale, and enabling cross-chain interoperability, the proof-of-concept demonstrated how holistic discretionary portfolios can be built across a fragmented landscape of tokenized traditional and alternative funds.
Experience the future of wealth management
The proof of concept is a working portfolio construction and management solution that demonstrates how a representative portfolio manager could create, deploy, rebalance and update a large number of portfolios, even when they contain alternative investments. To bring the proof of concept to life, we designed an illustrative portfolio manager and investor application, Crescendo, that showcases how the future of wealth management could look.
Turning challenges into opportunities
We identified key pain points in the asset and wealth management industry regarding the current state of portfolio management, and envisioned how tokenization could power a future of simpler, broader access to diversified, high performing investments.
Managing discretionary portfolios at scale is complex and does not enable straight through processing
Current state: Operationally intensive trade placements require multiple systems, steps and teams.
Future state: Simplified investment processes, coupled with the potential for enhanced liquidity through tokenization, could lead to better outcomes for clients.
Alternative investments are typically excluded from model portfolios, leading to sub-optimal investment outcomes
Current state: Custom workflows and liquidity concerns make alternative investments challenging to include in discretionary portfolios, resulting in burdensome manual processes for investors.
Future state: Normalized and automated asset deployment and portfolio management leveraging tokenization could streamline, simplify and standardize investments and trade settlement across different asset classes
The tokenized investment ecosystem is burgeoning and fragmented, creating access and liquidity challenges
Current state: Multiple tokenized investment projects are taking place on a variety of blockchain networks with different configurations, limiting access to a holistic portfolio management solution.
Future state: Connected, interoperable platforms that enhance the investment universe and provide a seamless investor experience could increase the adoption of tokenized investments.
Industry report
Project Guardian is a groundbreaking moment at the intersection of traditional finance and blockchain technology.
We believe the concepts put forward in this initiative could revolutionize the wealth management industry, and we encourage ecosystem participants to join us in building towards this future.
Read the joint report from Onyx and Apollo to learn more about the challenges, vision and technical solutions explored in the project.
A special thank you to the organizations who collaborated on Project Guardian
About Project
Guardian
Project Guardian is a collaborative initiative led by the Monetary Authority of Singapore and brings multiple industries together through various pilots to explore how tokenization and interoperable networks could establish the future of financial infrastructure.
Onyx by J.P. Morgan first participated in Project Guardian in 2022 by pioneering a novel digital identity solution and tokenized deposit infrastructure to conduct its first public blockchain decentralized finance (DeFi) transaction.
shape the future of wealth management
Join us in tackling the industry challenges associated with alternative investments and portfolio management, turning this vision into reality.
