KKR puts part of its $491 billion Private Equity fund on Avalanche blockchain

    14 Sep 2022

    US investment firm KKR & Co. has made its Health Care Strategic Growth Fund available on the Avalanche blockchain. The firm hopes that a tokenized fund will increase accessibility to individual investors.

    As The Wall Street Journal reported, investment giant KKR, which had $471 billion in assets under management at the end of 2021, is working with the digital-asset management platform Securitize Capital, which will handle the onboarding of new investors.

    Individuals will be able to invest in KKR’s healthcare fund through a tokenized feeder fund on the Avalanche blockchain provided by Securitize.

    “What we’re going to be providing to investors are digital asset securities or security tokens that represent an economic interest in a feeder fund of the main KKR healthcare fund,” co-founder and CEO of Securitize, Carlos Domingo, told CoinDesk. “It’s a way for individual investors to get access into a high-quality private equity fund – from a very reputable firm, like KKR – that otherwise is not available to them.”

    KKR said it hopes that the tokenized healthcare fund will provide a more accessible investment vehicle to individual investors.

    “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,” Dan Parant, managing director and co-head of US private wealth at KKR, said in the statement.

    The feeder fund is sold through its own broker-dealer called Securitized Markets. 

    “This new fund is an important step toward democratizing access to private equity investments by delivering more efficient access to institutional-quality products,” Carlos Domingo, Securitize CEO, said in the statement.

    Investors will need to setup an account with Securitize and go through KYC, and AML accreditation to invest in the fund, he added.

    According to executives, KKR’s move will mark the first time in American history that a significant private equity firm has made a piece of a fund available on the blockchain.

    As per Parant, individuals will be able to invest less money through tokenized funds than institutions would need to. In addition, Securitize’s digital onboarding procedure will make the task of monitoring transactions and screening investors easier.

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