Crowdfunding and other non-institutional capital raising efforts have kicked off with much fanfare in recent years, but administrative hurdles have hampered wider adoption, panelists at the PERE Investor Forum: Los Angeles agreed last week.

The biggest challenge for retail-focused efforts, including products such as non-traded real estate investment trusts, is documentation of communications between managers and retail investors, one speaker said. His firm is still working to implement procedures with retail investors that are standard for institutional capital, such as electronic signatures, in its capital-raising process.

Panelists agreed that blockchain, which facilitates the instant distribution of documentation on an immutable ledger, could be the solution – once the technology is developed enough for institutional use.

“With online capital raising, there was a big pop and then a lull because managers hadn’t figured out reporting and administration,” one panelist said. “But with blockchain and other technologies, there are lots of opportunities for efficiencies, so I think we’ll see another pop.”

Another challenge affecting non-institutional fundraising is efficiency. Non-traded REITs, crowdfunding and other retail-focused products could benefit from the economies of scale blockchain affords through standardized distribution. Managers have told PERE that it currently requires a significant amount of time and effort to reach thousands of independent broker-dealers and other gatekeepers to retail investors, each with individual sets of reporting requirements and other administrative hurdles that could be standardized via blockchain.

Some managers are building blockchain technology in-house, including Partners Group, according to sister publication pfm.

“If you can create efficiency so having 1,000 investors is as easy as 10, why not go retail?” one panelist said.

As institutional capital raising has slowed for the industry overall – PERE counted $93 billion raised last year, down from 2015’s peak of $149 billion – more managers are seeking to tap the retail market. Last month, Oaktree Capital Management was the latest private equity firm to register a non-traded REIT. The firm’s debut came on the heels of several similar strategies launched by TH Real Estate parent company Nuveen, Starwood Capital Group and Blackstone. CIM Group also entered the space in November through a company-level acquisition.

Going forward, the panelist said the groups most likely to raise significant retail capital are multi-asset class managers with existing access to retail investors.

“It’s a lot more expensive to build that [retail] reach from the ground-up,” the panelist said, echoing previous comments about the difficulties new managers face in the non-traded REIT space.

The session, “Beyond commingled funds,” featured speakers Adam Handwerker, managing director of Hodes Weill & Associates; Judy McMahan, real assets portfolio manager at UPS Investments; Allan Swaringen, chief executive of JLL Income Property Trust; and Jordan Fishfeld, co-founder of CFX Markets and was moderated by Sam Bendix, managing director of investor relations for National Real Estate Advisors.