Asset Giants Back New Private Market Platform
A new private-market investment platform called Corastone has attracted a slate of leading asset managers as investors, including Fidelity and Future Fund. They join initial backers Apollo, Franklin Templeton, and KKR, signaling strong institutional demand for standardized infrastructure in private markets.
Corastone is tackling the operational friction that has historically plagued private market investing. The platform utilizes permissioned blockchain technology to connect general partners, wealth managers, and fund administrators, aiming to automate and streamline workflows from subscriptions to capital calls and valuations. This single-layer approach is designed to replace the need for multiple systems and bespoke integrations that currently create complexity and barriers to entry. The move comes as individual investor participation in private markets is expected to surge. Bain & Company estimates that retail investors could drive up to 25% of the growth in alternative assets over the next decade. This anticipated influx necessitates a more scalable and efficient infrastructure to handle increased transaction volumes. For asset managers like KKR and Apollo, the platform offers a way to more efficiently tap into the growing demand from high-net-worth individuals. KKR, for instance, has already seen its "K-series" funds, which are tailored for individual investors, grow to approximately $34 billion in assets. Franklin Templeton has also been actively expanding its alternative investment offerings, aiming to "democratize" access for a broader client base. The private credit market, a key segment of private markets, has seen explosive growth, expanding from $500 billion to $1.3 trillion in the U.S. over the last five years alone. Forecasts suggest the global private credit market could reach as high as $5 trillion by 2029. This rapid expansion has been fueled by institutional investors searching for higher yields and diversification. However, this "democratization" is not without risks. Private market investments are inherently illiquid, often requiring lock-up periods of 5 to 10 years. Issues like opaque valuations and high fees have traditionally been challenges for investors in this space. Regulatory bodies in the U.S. and Europe are adapting rules to balance investor protection with increased access. Corastone was co-founded by CEO Rashad Kurbanov, who has a background at Merrill Lynch, UBS, and J.P. Morgan, and Hamid Gayibov, with experience at J.P. Morgan and BP. The platform's focus is solely on providing neutral, conflict-free digital infrastructure for all market participants.
