A leading private market investment firm is tokenising a class of shares from one of its funds for the first time, using the efficiencies of blockchain technology to make the minimum investment size far more affordable.
Hamilton Lane (NASDAQ:HLNE) has teamed with Singapore-based digital security exchange ADDX to tokenise a class of shares issued by Hamilton Lane Global Private Asset Fund, which as of January 31 had US$1.845 billion in assets in companies across nine industries, mostly tech and industrials.
The tokenisation means the GPA fund will be accessible to ADDX investors at a minimum ticket size of US$10,000, compared to the normal US$125,000 minimum for investors who subscribe via traditional channels.
But ADDX is still only accessible to wholesale investors, rather than smaller retail investors, although ADDX’s new CEO wants to change that. ADDX uses a permissioned version of Ethereum for its platform, which is fully licensed by the Monetary Authority of Singapore.
The GPA fund has returned 16.1 per cent annualised since its inception in May 2019.
Hamilton Lane is one of the world’s largest investors and allocators of capital to private markets, having deployed $37 billion last year.
“Hamilton Lane is dedicated to providing access to the private markets for a broader set of investors, and to doing so without some of the headaches that have historically been challenging for smaller investors,” said Hamilton Lane chairman and head of international, Juan Delgado-Moreira.
“We seek to partner with firms that deliver transformative technology designed to drive our industry forward, and are excited to offer our investors access to GPA through this new platform.”
ADDX CEO Oi-Yee Choo said that many investors don’t realise that private markets are much bigger than public markets. (Private markets could include private debt, private equity, hedge funds or real estate – any assets that aren’t traded on traditional exchanges.)
“Globally, more than 90 per cent of companies with an annual turnover of US$100 million or more are private,” Choo said.
“For any investor, leaving private equity out of your portfolio essentially means turning one’s back on the vast majority of investment opportunities in the market.
“At a time of unprecedented volatility and declining returns in the public markets, diversification into the private markets is more important than ever.”