Mark Templeman, Chief Technology Officer for independent UK property lender ASK Partners, comments on technology’s role in the value chain for investment gains in real estate.

Sirs,

The investment value chain has long been cluttered with intermediaries, dampening returns for investors and fostering inefficiencies and opacity within the financial sector. However, the rapid evolution of technology, particularly in real estate finance and wealth management, presents an opportunity for transformation. ASK stands at the forefront, pioneering a drive towards enhanced returns, direct investment visibility, and increased liquidity for investors.

The real estate investment journey involves directing individual savings into tangible assets, mainly properties, with the goal of nurturing long-term value and delivering returns. This intricate process, known as the ‘value chain,’ stands to significantly benefit from technological innovations as we endeavour to construct a seamlessly integrated investing platform.

The real estate investing value chain comprises three pivotal steps: aggregation, origination, and execution. Aggregation consolidates individual savings from various sources such as pensions, endowments, or investment advisors, creating pooled funds for generating returns. Origination involves investment managers procuring capital from aggregators to fund specific strategies, collaborating with on-ground operators for execution. Execution entails implementing strategies through operating partners like real estate firms.

Although intermediaries such as brokers, lawyers, and banks have historically played essential roles in the real estate ecosystem, emerging technologies—particularly blockchain, digitised legal contracts, open banking, and e-money infrastructure—have the potential to streamline these functions, empowering clients to maximise investments by reducing fees and enhancing efficiency.

ASK’s platform consolidates various aspects of the value chain, offering a hassle-free solution for private clients. The ASK digital platform provides users with real-time portfolio views and employs a sophisticated algorithm to calculate interest across multiple product types. This is being further developed using blockchain ledger technology to augment this process, providing benefits such as immutability, security, efficiency, and traceability. The latter is vital for automated solutions in the secondary market and operations, enhancing accessibility and transparency.

Access is also another key point. Historically the layers have meant only large institutional transactions took place to provide the necessary funding to property entrepreneurs; effectively pooling money into large funds and then allocating out these funds into various investments. Digital models effectively tokenise property assets through a decentralised model, much like other blockchain tokenised assets, which provides the end investor direct access to the underlying asset and ability to trade it on a secondary market.

Simplifying often complex documentation requirements and converting customised forms into standardised documents for user convenience enhances document access and signing processes. Furthermore, it facilitates money transfers, eliminating the traditional slow and expensive processes associated with alternative asset investing. Integration with e-money infrastructure and open banking expedites payments and automates operational tasks, replacing the traditional, operationally intensive banking model run on legacy technology which only increases the cost for the investor.

While transparency has always been crucial, inefficiencies have historically obscured portfolio compositions and fee structures.

While transparency has always been crucial, inefficiencies have historically obscured portfolio compositions and fee structures. A streamlined value chain provides clearer visibility, offering investors comprehensive details on fees and portfolios.

The use of blockchain technologies allows efficient processing of transactions, and integration with open banking and e-money infrastructures eliminates operational inefficiencies. This digital transformation, combined with user-friendly access, significantly improves the overall value chain.

Innovation and integration are vital for reshaping the market, replacing traditional fund managers and operators, and fostering evolution in the property finance and private investment sectors.

Mark Templeman,

Chief Technology Officer

ASK Partners