Digital asset company Securitize Capital is set to tokenize $491 billion asset management firm KKR’s Health Care Strategic Growth Fund II (HCSG II) on the Avalanche blockchain.
The news was shared by KKR on September 13, with the tokenization of HCSG II described by Securitize Capital chief Wilfried Day as a “significant breakthrough” for individual access to private equity markets.
The token enables investors to own tokens representing part of a $4 billion health-focused fund that invests in 23 North American and European-based companies with expertise in the pharmaceuticals, medical devices and life sciences sectors.
To buy into the HCSG II Fund on the Securitization Protocol, investors must submit their passports, fill out personal and tax information, and complete a “liveness check” for review. Investors are also subject to a 0.50% management fee.
Emin Gunn Serer, founder and CEO of Ava Labs, said that the tokenization of the HCSG II fund is a “huge milestone” for the blockchain industry in enabling the transfer of “real-world assets” on-chain:
Big news: K in touch with a flagship fund @KKR_CoAvalanche is being tokenized by one of the world’s largest institutions @Securitize, This is a huge milestone by Wall Street for the coming real-world assets of blockchain and on-chain https://t.co/03iQY8OTpl
— Emin Gunn Sirer (@el33th4xor) 13 September 2022
KKR said that on-chain tokenization of real-world assets “reduces investment minimums, improves digital investor onboarding and compliance protocols, and increases liquidity potential through a regulated alternative trading system.”
related: Tokenization, Explained
The token’s potential to capture a substantial portion of global assets has also been acknowledged by the blockchain research hub of Boston Consultant Group (BCG) and Riefen Bank International.
BCG predicts that $16.1 trillion worth of illicit assets will be tokenized by 2030, while Riefen Bank International’s Blockchain Research Hub predicted last year that most securities would be tokenized by 2030.
Securitize Capital operates the Securitize protocol, which was integrated into the Avalanche blockchain in December 2020, and is focused on “reinventing private capital markets by providing a reliable end-to-end security token solution.”
