Hamilton Lane tokenizes funds to offer individual investors access to private markets

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

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

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

Hamilton’s tokenized funds are expected to be available in Q4, allowing a broader investor base to access the funds. Clients will still need to be in good standing, which means those with a net worth of more than $1 million or income greater than $200,000.

Victor Jung, Director of Digital Assets at Hamilton Lane, commented on the development: “This collaboration with Securitize is our latest step in enabling access to the strong returns and yield opportunities generated within the private markets space for a new set of investors while increasing ease of use and transparency through the use of blockchain technology.”

The new tokenized funds highlight Hamilton’s commitment to expanding ease of access to 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 the access of private market strategies to retail investors.

Therefore, converting funds into security tokens allows individual investors to put money into assets that were previously only accessible to institutions. It reduces issuance and administration costs and allows for fractional ownership.

Hamilton Lane’s move follows last month’s announcement when KKR further leveraged blockchain technology to open up its private equity strategy to individual investors. The developments point to a number of asset management companies using intermediaries to expand access to funds to high net worth individuals and accredited investors.

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

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