Global investment giant KKR & Co has partnered with digital asset management firm Securitize to tokenize its private equity fund on a public blockchain network.
According to an official press release, the partnership will allow the KKR to tokenize its second Health Care Strategic Growth Fund on the Avalanche blockchain, making it accessible to investors with at least $5 million in investible assets.
KKR Offers Tokenized Funds to Investors
The growth fund is a $4 billion vehicle that invests in growing healthcare companies in North America and Europe.
Dan Parant, managing director and co-head of US private wealth at KKR, stated that the firm has been receiving increasing interest from individual investors regarding the fund.
He also noted that tokenized funds eliminate many of the barriers that prevent individual investors from accessing private equities. For instance, tokenized funds allow individuals to easily access private equities while enabling them to invest smaller amounts.
“With its ability to digitize operational inefficiencies and increase ease of use for individual investors, blockchain technology has the potential to play an important role in the future of private markets,” Parant added.
With the help of Securitize’s tokenized feeder fund on Avalanche, eligible investors will be able to purchase KKR’s growth fund. Investors will have to hold the security for a year before selling it to other qualified purchasers on a secondary market managed by Securitize.
Speaking on the development, Securitize CEO Carlos Domingo said:
“This new fund is an important step toward democratizing access to private equity investments by delivering more efficient access to institutional-quality products.”
KKR Invests in Crypto Firms
Although this is KKR’s first tokenized fund, the buyout company has been relatively active in the crypto industry and has recently backed a couple of crypto firms.
The private-equity giant made its first blockchain investment in September 2021 after acquiring a stake in crypto-native investment and technology firm ParaFi Capital.
In April, the KKR participated in a $640 million fundraiser for the crypto-focused investment firm Dragonfly Capital.
KKR also planned to participate in the recently-concluded $100 million funding round for the blockchain gaming powerhouse Animoca Brands but had to back out due to the recent market crash.