US investment major KKR’s latest health-care-specific private equity fund is now tokenized on the Avalanche blockchain. The development marks an era-defining association between real-world assets and blockchain technology.
Previously, private equities weren’t easily accessible to people who had minimum funds to invest. Tokenizing an entire fund like this will help investors make use of the fractional nature of crypto while maintaining real-world exposure.
Who is in charge of tokenization?
Securitize Capital, a reputed digital asset firm, has taken the responsibility of tokenizing KKR’s newest HCSG II (Health Care Strategic Growth Fund II). Wilfred Day, head of Securitize Capital, termed this development a “significant breakthrough.” Tokenization now opens access to a leading private equity fund to individuals. Hopefully, other PE funds will also join the ranks.
Why is this significant?
The HCSG II is a $4 billion fund with investments in top 23 European and North American firms active in sectors like life sciences, pharmaceuticals, and medical devices. Earlier, people who wished to invest in the HCSG II fund had to go through a detailed liveness (credentials) check. They also had to pay half a percent management fee.
Tokenization changes everything as it speeds up investor onboarding, lowers investment threshold, and increases liquidity.
Understanding the process
Securitize Capital has been handling the Securitize protocol on the Avalanche blockchain since 2020. The protocol is responsible for putting together the tokenized feeder fund where tokens can be purchased to gain exposure to the health-focused private equity fund.
KKR’s move is a step towards democratizing private equity access and investments, Securitize chief executive Carlos Domingo said.