Fund administration firm Apex Group announced it will acquire 100% of Luxembourg fund tokenization startup Tokeny over a three year period. Apex participated in Tokeny’s 2022 funding round, and in December 2023 became its lead strategic investor. Stock exchange Euronext said it took a 23.5% stake in mid 2019.
“As a majority owner, Apex Group is enhancing its ability to deliver comprehensive, future-proof solutions to our clients,” said Peter Hughes, Founder and CEO of Apex Group. “Tokenisation is a foundational shift in how assets will be managed, distributed, and accessed. Our strengthened partnership with Tokeny is key to delivering on our vision to be the infrastructure provider in the digital era of finance.”
Blockchain offers benefits in fund administration by automating many processes using smart contracts. Additionally, there’s the appeal of permissionless blockchains helping to expand the target market of asset managers through fractionalization and their international reach. To date the tokenization of money market funds has started to gain early traction.
But there are multiple tailwinds beyond the base real world asset (RWA) tokenization buzz. The Commodity Futures Trading Commission (CFTC) is running tokenization pilots for collateral enabling tokenized assets to be posted as margin. This is likely to favor stablecoins and tokenized money market funds. With stablecoins having their breakout moment, many new stablecoin issuers are looking to use tokenized money market funds as backing assets. More recently the Securities and Exchange Commission (SEC) announced it plans to review the retail threshold for investing in fixed term private funds. Alternative asset managers are not set up to cater to retail, but the automation enabled by smart contracts and the reach of permissionless blockchains offers a cost effective pathway to expand their retail reach.
Tokeny’s tokenization track record
Tokeny is best known as the founder of the T-REX ERC-3643 securities tokenization standard, which supports permissioned tokens on public blockchains. Using the standard, it was recently involved in a cross chain deliver versus payment (DvP) trial between the Polygon and Base blockchains, involving LayerZero, ABN AMRO and Fasanara Capital.
The company says it has tokenized $32 billion in assets based on a client survey from around four years ago, so it’s likely far more. As a SaaS platform, Tokeny lacks full visibility into all client usage. Among its notable partners, data automation firm Inveniam – both an investor in Tokeny and a tokenization user – manages more than $65 billion of assets on its platform, potentially contributing significantly to Tokeny’s overall tokenization volume. Beyond this relationship, Tokeny works with various high profile clients, including ABN AMRO, for whom it has tokenized bond issuances.
“To bring tokenisation to scale, institutional distribution and credibility are key – and that’s exactly what Apex Group brings to the table. We’re proud to align with their vision to deliver tangible innovation to the financial industry,” said Luc Falempin, CEO of Tokeny.
Apex’s tokenization history
Meanwhile, Apex Group has been leaning into blockchain and tokenization for a few years now. It acquired the permissioned administration platform FundAdminChain in early 2022. The company has partnered with both incumbent asset managers such as Hamilton Lane, but also crypto native firms such as Deutsche Börse owned Crypto Finance and earlier this month it inked a deal with Coinbase Asset Management to provide digital fund administration services.
