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Interview with David Genn, CEO of Goji by Alexandre Hector, Partner at KPMG Luxembourg as published in Insight Out #29.
In this interview, David Genn showcases how Goji – through its integration into the Euroclear financial markets ecosystem – facilitates interactions between distributors and private fund managers, democratising access to the alternative assets industry.
Based on your experience, what are the critical operational and distribution challenges in the alternative asset sector?
The alternative asset sector lacks scalability and connectivity. Without homogenised, industry-wide technological infrastructure, the market is fragmented and continues to rely on cost-ineffective, labour-intensive manual processes, and outdated software that can’t scale to meet demand.
In terms of distribution, private markets tend to rely on bilateral relationships with institutional investors who can meet high investment minimums. However, demand is growing in the private wealth community as high-net-worth individuals want to unlock the same high returns enjoyed by institutions.
For managers who want to distribute their funds through private wealth channels, negotiating a separate agreement with each distributor is time consuming and expensive. By facilitating global distribution agreements on our platform, we can solve this problem, allowing managers to distribute to higher numbers of private wealth investors without needing to sign a new agreement for each distributor.
What is your view on the evolution of demand in the coming decade?
Many institutional investors are already turning to alternative assets for higher returns and portfolio diversification. Now we are also seeing increased allocations from private wealth to private market funds.
While individuals have traditionally had difficulty accessing private assets due to high entry points, limited operational infrastructure to manage high volumes, and a lack of regulation, they continue to demand access. As market infrastructure continues to evolve with scalability and connectivity at the core, we anticipate that allocations will skyrocket from private wealth investors.
We also expect to see rising interest from jurisdictions outside of Europe and North America. The APAC region is seeing record growth in allocations to private funds. This is largely thanks to high-net-worth individuals intending to raise their allocations to private markets to take advantage of the increased security that comes from liquidity and risk visibility.
Following Euroclear’s acquisition of Goji, how do you envision the future of digitisation service providers in the private markets?
After assessing the needs of the industry, Euroclear discovered that a lack of scalability was creating issues for private market participants.
In particular, the process for managing investor KYC and capital calls needed to be modernised and made scalable to cope with increasing investor volumes. By acquiring Goji, Euroclear can provide a comprehensive, scalable solution for private markets to their existing clients who already use the FundSettle platform, without them needing to adopt new technologies or processes.
Innovation and transformation in private markets are driven by digitisation service providers such as Goji. With the backing of established financial market infrastructures like Euroclear, these providers can scale globally to meet ever-increasing client demand.
How do you anticipate technological developments will foster growth in the alternative asset sector?
We expect that technological developments in the alternative asset sector will continue to drive the democratisation of this industry, opening access to an even larger group of investors. For example, Goji’s investment platform technology has enabled Euroclear FundsPlace to offer access to a universe of private market funds through the same point of entry as for mutual funds and ETFs.
Accessibility in private markets will be furthered by developments in blockchain technology and tokenisation. The integration of these technological developments creates a mutual infrastructure that provides a platform for all to access alternative assets in a digital, secure, and transparent way.
We are always looking into developing technologies, blockchain and tokenisation included, and aim to continue boosting access to private markets through a common market infrastructure across all asset classes and market participants.
| ABOUT GOJI Euroclear’s private markets solution forms a part of its broader FundsPlace offering, allowing market participants to access both private funds and mutual funds from a single point of entry. Goji’s technology is integrated into Euroclear’s financial market infrastructure, creating a global network for private market funds that digitises the entire investment lifecycle. This includes streamlined investor onboarding and a digitised subscription process where documentation is pre-filled with investor details and can be signed digitally by clients. Once the investor has subscribed into the fund, Goji can offer digitised and automated capital calls and distributions, leveraging Euroclear’s banking infrastructure to give distributors and investors visibility over capital events. Finally, Goji provides real-time access to fund and portfolio-level reporting and transaction data, satisfying investor demand for transparency. By accessing Euroclear’s private funds solution, asset managers can connect with more than 2,000 distributors already in the Euroclear network, and fund administrators can offer a fully digitised private funds service to drive growth and overcome operational inefficiencies. Distributors can connect to a universe of private funds, across asset classes and fund types, therefore increasing the opportunities available to their clients. |
