Ben Strack

<div id="highlights-block_633d87ebfea2e" class="highlights">
 <ul>
 <li>Hamilton Lane funds to be available on a yet-to-be-determined “reputable” blockchain, spokesperson says</li>
 <li>Securitize revealed tokenized version of a KKR health care fund on the Avalanche blockchain last month</li>
 </ul>
 
</div>



Private markets investment firm Hamilton Lane is making three of its funds available via tokenized feeder funds as it expands access to the vehicles beyond just institutions.&nbsp;



The firm, which managed or supervised $832 billion in assets as of June 30, has partnered with digital asset securities firm Securitize to tokenize funds offering exposure to equities, private credit and secondary transactions.&nbsp;



Securitize CEO Carlos Domingo said in a statement that Hamilton Lane’s products, historically only available to institutions, will now be available to qualified US-based investors.



“Tokenization now makes it possible for individual investors to participate in private equity value creation for the first time in a digitally native way,” Domingo said.



<blockquote class="wp-block-quote">“We are at the beginning of a process through which individual investors can access the same kinds of opportunities as university endowments or sovereign wealth funds, and that is very exciting,” he said.</blockquote>



The Hamilton Lane funds are set to be tokenized by Securitize’s digital transfer agency and managed by its digital asset management arm. The crypto firm intends to make them available for investment via its brokerage platform, Securitize Markets, this quarter.



The investment firm teamed up with ADDX earlier this year to tokenize a class of shares issued by the Hamilton Lane Global Private Assets Fund for investors in Asia.



The news comes a few weeks after Securitize revealed the launch of a fund tokenizing an interest in <a href="https://www.kkr.com/" target="_blank" rel="noreferrer noopener">KKR</a>’s Health Care Strategic Growth Fund II on the Avalanche public blockchain. KKR, which offers alternative asset management, as well as capital markets and insurance solutions, had $491 million as of June 30.&nbsp;



Securitize also made available <a href="https://www.youtube.com/watch?v=KXtC1KdYJjg" target="_blank" rel="noreferrer noopener">a tokenized art fund</a> from Artory and Winston Art Group on its platform last month. The $25 million closed-end fund is actively managed and is on the Polygon blockchain.



The Hamilton Lane funds will be on “a similarly reputable” public blockchain, a spokesperson told Blockworks, though the companies have not yet determined which one.



“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,&#8221; Victor Jung, Hamilton Lane’s head of digital assets, said in a statement.



Though the funds are not available to the broader retail investor segment, DQYDJ reported that 10.6% of American households were accredited in 2020. Those households controlled roughly $73 trillion of wealth.&nbsp;



“We are looking into how this market may evolve and be more inclusive of retail investors in the future, but we are not there yet,” a Hamilton Lane spokesperson told Blockworks.



<a href="https://cms.blockworks.co/arca-labs-and-securitize-partner-on-tokenized-us-treasury-fund/" target="_blank" rel="noreferrer noopener">Arca Labs partnered with Securitize</a> last year to bring a tokenized United States Treasury fund to market. The companies revealed at the time that shares would be issued through ArCoin digital asset security tokens, and that records of token ownership would be maintained off-chain.&nbsp;



A few months prior, <a href="https://cms.blockworks.co/morgan-stanley-blockchain-capital-lead-48m-funding-for-securitize/" target="_blank" rel="noreferrer noopener">Securitize raised $48 million in a funding round</a> co-led by Morgan Stanley and Blockchain Capital.



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Private Markets Investment Firm Hamilton Lane To Tokenize 3 Funds

<div id="highlights-block_625d7b0c9b850" class="highlights">
 <ul>
 <li>Registered digital securities will become “the new de facto digital marketplace,” Digital Funds&#8217; founder says</li>
 <li>WisdomTree filed last year to launch a Digital Short-Term Treasury Fund that would secondarily record its shares on one or more blockchains</li>
 </ul>
 
</div>



A newly created digital asset manager that filed last month for its first ETF is seeking to bring another offering to market.



Digital Funds has filed to launch a Tokenized S&amp;P 500 EW Index Fund that would primarily invest in the securities of issuers included in the S&amp;P 500 Equal Weight Index, according to <a href="https://www.sec.gov/Archives/edgar/data/0001894485/000114036122014131/brhc10036259_n1a.htm" target="_blank" rel="noreferrer noopener">a regulatory disclosure</a> filed last week.



Though the fund’s official record of share ownership would be maintained in book-entry form, they will also be recorded — as digital tokens — on the Algorand blockchain, the filing states. Fund shares may eventually be recorded on other blockchain protocols.



The fund will not invest in any assets that rely on blockchain technology, such as cryptocurrencies, the filing states.



Michael Willis, who founded Digital Funds in December, told Blockworks that registered digital securities will become “the new de facto digital marketplace” as the unregistered space endures more scrutiny from regulators.&nbsp;&nbsp;



“Until now, the registered digital securities marketplace has lacked a high-quality, easy-to-price, immediately recognizable security,” he added. “Therefore, adoption has been limited. We believe the approval of a marquee tokenized index fund has the potential to break adoption wide open.&#8221;



Similarly, WisdomTree <a href="https://www.sec.gov/Archives/edgar/data/1859001/000119312521136968/d156395dn1a.htm" target="_blank" rel="noreferrer noopener">filed last year</a> to launch a Digital Short-Term Treasury Fund that would secondarily record its shares on one or more blockchains.&nbsp;



Sumit Roy, crypto editor and analyst for ETF.com, previously told Blockworks that it’s conceivable for the shares’ official record to live on the blockchain in the future — allowing investors to trade their shares peer-to-peer — but noted there are regulatory hurdles to get past first.&nbsp;&nbsp;



The latest Digital Funds filing comes after the Florida-based firm <a href="https://cms.blockworks.co/new-digital-asset-manager-files-for-first-etf/" target="_blank" rel="noreferrer noopener">revealed plans last month</a> to launch an S&amp;P 500 Bitcoin 75/25 Index ETF. The proposed fund would invest roughly 75% of its assets in large US companies within the S&amp;P 500 Index and about 25% of its assets in bitcoin futures contracts.



Willis called bitcoin “really volatile” at the time, noting that the S&amp;P 500 exposure provides more stability to a bitcoin portfolio.



“We believe registered digital securities will replace the current financial legacy system because they are better engineered at every level,” Willis said, noting the advantages of selling from anywhere at any time, with immediate settlement. “Self-banking and peer-to-peer payments is a dream once thought impossible, but shortly will be a reality.”



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tokenized fund