(Bloomberg) -- Investment manager Hamilton Lane Inc. is planning to deploy blockchain technology to make its private markets offerings more accessible to individual investors.
The firm will be among the first in the $1.2 trillion private-credit market to make its funds available through tokenization -- a method of purchasing securities in the form of digital tokens using blockchain, that operates similarly to shares.
Hamilton is partnering with Securitize, a digital assets securities firm, which will oversee the process, according to a Wednesday statement. The idea behind tokenization is to help make the private markets -- traditionally dominated by institutional and high-net worth investors -- more accessible to individuals, too.
“We are at the beginning of a process through which individual investors can access the same kinds of opportunities as university endowments or sovereign wealth funds, and that is very exciting,” said Carlos Domingo, chief executive officer of Securitize.
Through the arrangement, investors will be able to access a trio of Hamilton Lane funds with exposure to equities, private-credit and secondary investments, via new tokenized feeder funds.
The tokenized funds will be available for investment later in the fourth quarter. Early investors will be restricted for one year from selling the tokens.
Private-credit has boomed over the last five years, doubling in size, as institutional investors such as pension funds, insurance companies, sovereign wealth funds and family offices searched for yield in what was a historically low interest rate environment. But over the last 12 months, many firms have launched funds to tap into the constituency of individual investors.
This week, Benefit Street Partners launched a fund focused on providing loans to US middle market companies that is open to individual investors. Earlier this year, private-credit firms such as Oaktree Capital Management, HPS Investment Partners and Apollo Global Management set up business development companies of their own, which are fund structures open to individual investors.
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