To access the fund under the Securitize protocol, investors must present their passports, fill out personal and tax information and pass a “viability check”.
Digital asset firm Securitize Capital will tokenize a $491 billion stake in asset management firm KKR’s Health Care Strategic Growth Fund II (HCSG II) on the Avalanche blockchain.
The news was published by KKR on Tuesday, and HCSG II tokenization was hailed as a “significant breakthrough” for individual access to the private equity markets by Wilfred Day, CEO of Securitize Capital.
Tokenization allows investors to own a token representing a stake in a $4 billion healthcare-focused fund that invests in 23 North American and European pharmaceutical, medical device and life science companies are.
To buy into the HCSG II fund under the Securitize protocol, investors must submit their passports, complete personal and tax information and pass a “viability check” for verification. Investors are also subject to a 0.50% management fee.
Ava Labs Founder and CEO Emin Gün Sirer said that the tokenization of the HCSG II fund is a “major milestone” for the blockchain industry, allowing “real assets” to move along the chain:
KKR explained that on-chain tokenization of Real Assets also “reduces the minimum investment, improves registration and compliance protocols for digital investors, and increases liquidity potential through a regulated alternative trading system.”
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The potential for tokenization to capture a significant portion of global wealth has also been recognized by the Boston Consultant Group (BCG) and Raiffeisen Bank International’s Blockchain Research Center.
BCG predicts that $16.1 trillion worth of illiquid assets will be tokenized by 2030.
Securitize Capital uses the Securitize protocol, which was integrated into the Avalanche blockchain in December 2020 and aims to “reinvent the private capital markets by providing trusted end-to-end security token solutions.”