Nasdaq Stock Market Inc. is seeking to expand the market for alternative investment funds with a new service that aims to improve liquidity in this area of the market.
The exchange’s Nasdaq Private Market (NPM) business unit announced the launch of a new business line focused on enhancing access to alternative funds by improving liquidity for these instruments. Initially, it will support secondary market liquidity for private equity feeder funds, but it aims to expand to other sorts of alternative funds in the future.
The new venture, NPM Alternatives, aims to bring together fund managers, financial advisors, investors and secondary liquidity providers to facilitate regular, auction-based liquidity events for alternative investment funds.
“With the increasing demand for alternative investment products from high net worth investors, and fund managers’ desire to expand access to new investors, a solution for liquidity becomes a critical enabler for new capital formation,” says Adena Friedman, CEO of Nasdaq, in a statement. “The question of liquidity continues to challenge the alternatives industry, and Nasdaq is excited to leverage its core strengths to bring this essential evolution to market.”
The new service also uses blockchain technology to streamline the payment and settlement process. The exchange also notes that it has received approval from both regulators and tax officials for its approach to the new business.