Tag: securitize

Hamilton Lane Tokenizes Funds to Offer Individual Investors Access Private Markets

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Hamilton Lane, a global private markets investment firm, formed a partnership deal with digital asset securities firm Securitize to tokenize three of its investment funds on Wednesday. 

Through the partnership, funds to be tokenized include unlisted equities, private credit, and secondary transactions.

Hamilton Lane, which has $835 billion in assets under management, plans to give qualified U.S.-based investors access to funds through providing exposure to direct equities, private credit, and secondary transactions, which will be tokenized via Securitize’s blockchain-based digital transfer agency.

Hamilton’s tokenized funds are expected to be available by the fourth quarter, enabling a broader investor base to access the funds. Customers will still need to be accredited, which means those with a net worth of more than $1 million or income above $200,000.

Victor Jung, Head of Digital Assets at Hamilton Lane, commented about the development: “This collaboration with Securitize is our latest step toward enabling access to the strong returns and performance opportunities generated within the private markets space for a newer set of investors while increasing usability and transparency through the use of blockchain technology.”

The new tokenized funds highlight Hamilton’s commitment to expanding ease of access to the private markets through the use of blockchain technology. Private-equity investments are generally accessible only to institutional investors or ultra-high-net-worth investors. But blockchain has opened up the access of private-market strategies to retail investors.

Therefore, converting funds into security tokens enables individual investors to place money in assets previously only accessible to institutions. It reduces issuance and administration costs and enables fractional ownership.

Hamilton Lane’s move follows the announcement last month when KKR tapped blockchain technology further to open its private equity strategy to individual investors. The developments signal a series of asset management firms using intermediaries to expand access to funds to high net-worth individuals and accredited investors.

Other asset managers, like Partners Group, Investcorp, and Temasek-backed Mapletree, also tokenized their funds recently, as they know that individual investors will increasingly drive their growth investments.

BlackRock Launches Pioneering Tokenized Asset Fund in Partnership with Securitize

BlackRock, the world’s largest asset manager, has filed a Form D for its inaugural tokenized asset fund, named the BlackRock USD Institutional Digital Liquidity Fund. As of 2023, this innovative fund represents a landmark development in the financial sector’s embrace of blockchain technology and tokenization.

The fund, which necessitates a substantial minimum investment of $100,000, is aimed squarely at institutional investors seeking exposure to digital assets through a regulated and familiar framework. By engaging with Securitize, a leading U.S.-based digital assets securities firm, BlackRock has signaled its confidence in the potential of tokenized securities to revolutionize investment strategies.

Tokenization refers to the process of issuing a blockchain token that digitally represents a real tradable asset. In the case of BlackRock’s new fund, the assets under management are transformed into digital tokens, providing investors with a more seamless and efficient way to invest and trade in the fund’s shares.

The Form D filing reveals that sales commissions total $525,000, a figure that underscores the active interest and investments already flowing into the fund. Additionally, the filing indicates that the size of the fund is “indefinite,” suggesting that BlackRock is positioning itself to accommodate a potentially significant influx of capital as interest in digital assets continues to grow.

BlackRock’s move is indicative of the wider financial industry’s trend towards the tokenization of assets, where securities are increasingly being issued on blockchain platforms to take advantage of the technology’s benefits, including transparency, security, and speed of transactions.

This initiative is not only a testament to BlackRock’s innovative approach but also a reflection of the growing demand from institutional investors for digital asset products. By leveraging the blockchain, BlackRock stands to offer enhanced liquidity, real-time settlement, and potentially lower transaction costs, presenting a compelling value proposition for investors looking to diversify their portfolios.

The launch of BlackRock’s tokenized asset fund also raises questions about the regulatory landscape for such offerings. While blockchain and tokenization present new opportunities, they also come with regulatory considerations that asset managers like BlackRock must navigate. The involvement of Securitize, a firm that specializes in the compliant issuance and trading of digital securities, is key to ensuring that the fund operates within the bounds set by regulatory bodies.

In conclusion, BlackRock’s foray into tokenized asset funds with the BlackRock USD Institutional Digital Liquidity Fund represents a significant milestone in the integration of traditional finance with digital assets. As regulatory frameworks continue to evolve and adapt to these new technologies, the potential for tokenized funds to reshape the investment landscape is considerable. With a combination of BlackRock’s industry-leading position and Securitize’s digital asset expertise, this fund is poised to be a bellwether in the intersection of finance and blockchain technology.

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