Today digital assets firm Securitize announced that it tokenized an interest in KKR‘s Health Care Strategic Growth Fund II. The security token was issued on the Avalanche public blockchain and Securitize Capital manages the tokenized fund.
While tokenizing the fund is intended to broaden the pool of investors, it is a regulated issuance under SEC Reg D 506(c). That restricts investment to accredited investors with a net worth of more than $1 million or an income of more than $200,000. However, as with other tokens, the investment minimums are smaller, lowering the barrier to entry.
“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,” said Dan Parant, Managing Director and Co-Head of U.S. Private Wealth at KKR. He added that “(we) look forward to opening our investments up to a new audience of investors.” KKR had $491 billion in assets under management at the end of June.
KKR’s other crypto activities include leading the $350 million funding round in crypto bank Anchorage, and participating in the $650m Dragonfly Capital crypto fund. It was rumored to be interested in backing Animoca Brands but reportedly dropped out after the crypto crash.
Meanwhile, Securitize is one of the major startups active in the security token sector. In the middle of last year, it raised a $48 million Series B round that included Morgan Stanley Tactical Value and IDC Ventures. It has an array of big-name Japanese investors, a region where it is active, including issuing a novel blockchain bond for Japanese retailer Marui. Securitize also provides a U.S. regulated secondary market trading venue.
In the last six months there has been elevated interest in blockchain from the mainstream funds and asset management sector.