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.
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