A survey by fund distributor Calastone found that 67% of U.S. asset managers expect to have tokenized products on the market within a year. In Asia the figure was 61%. However, 96% of Asian asset managers expect to tokenize funds within three years.
The number of asset managers currently implementing DLT was somewhat lower at 39% and 37% for the US and Asia respectively. However, the vast majority of the rest are exploring the technology. Europeans are still pretty interested but lag behind Asia and the United States. Seventeen percent of Europeans are not yet engaging in tokenization followed by the U.S. (6%) and APAC (5%).
Turning to motivations for tokenization, almost a third of Asian asset managers cited cost savings. A quarter believes it will enable more personalized investment experiences. ‘Enhanced liquidity management’ is the third-ranked driver at 23%. By that, we assume they mean fractionalization will open up investment to a wider audience. Another key benefit is enabling investors to access new asset classes (22%).
The survey was conducted in Q3 with 141 participants, of which 80% were asset managers with the others being service providers such as administrators and custodians. Almost half of those surveyed were in the UK and Europe, just over a third in Asia and the balance in the United States.
“This survey shows that asset managers in the region (Asia) are keen to capitalise on the benefits of tokenisation and are gearing up for implementation at an impressive pace with scalable implementations already taking place in product development, distribution and trading,” said Justin Christopher, Head of Asia at Calastone. “Proactive efforts by regional governments and the private sector to form collaborative initiatives, like Project Guardian here in Singapore, have been critical in supporting Asia’s lead on the global stage.”
Project Guardian and asset management
Project Guardian now includes several fund tokenization use cases. Last week, JP Morgan said it had partnered with Apollo Global to tokenize funds. They aim to enable greater automation and personalization of discretionary portfolios for wealthy clients. Calastone announced some time ago that it’s working with Schroders. And SBI Digital Markets is working with UBS on tokenizing a money market fund.