Figure Technologies, Inc. and Hamilton Lane (NASDAQ: HLNE) are preparing to launch three new share classes of Hamilton Lane’s private markets-focused fund registered under the Investment Company Act of 1940 that “digitize the fund share ownership record on the Provenance Blockchain using Figure’s Digital Fund Services (DFS) platform.”
Hamilton Lane, one of the largest private markets investment firms globally, “first filed for the new share classes on October 26, 2022, for its Private Assets Fund (‘PAF’ or the ‘Fund’).”
Hamilton Lane’s expected launch of the new share classes also “marks the first time a firm has provided exposure to a private markets investment strategy under the 1940 Act through a blockchain-native share class, and is its latest significant step in transforming and reducing inefficiencies within the private markets industry.”
As a 1940 Act registered fund, PAF is “more widely available to qualified U.S. investors, including certain individual investors, their wealth advisors, as well as institutions.”
It provides “access to a diversified portfolio of private equity and private credit assets through a single investment – either through the traditional primary issuance process or via Figure’s DFS platform.”
Hamilton Lane is initially “using DFS to streamline the primary issuance process and plans to launch two additional closed-end private market funds on the DFS platform in the coming months.”
Investors in the Fund will also “benefit from Universal Passporting, which allows investors to reuse their KYC/AML credentials as they move to new investments, reducing time, cost and friction.”
DFS utilizes the Provenance Blockchain “to perform functions such as cap table management, capital calls, distributions and shareholder communication.” The Provenance Blockchain was purpose-built in “a regulatory-compliant manner with the scale, security and cost structure required for financial institutions.”
Victor Jung, Head of Digital Assets at Hamilton Lane, said:
“We are thrilled to be partnering with Figure to offer another digital-first means for investors to access the private markets. Hamilton Lane was one of the earliest major private markets firms to tokenize a fund, and we remain committed to identifying innovative technology solutions as a means of solving for some of the traditional pain points in the asset class,” said
This is the latest development in “support of the firm’s commitment to utilizing technology to broaden investor access to the private markets.”
The announcement “follows other recent steps Hamilton Lane has taken to broaden access to its Global Private Assets Fund and as well as other closed-end funds it manages.”
Mike Cagney, co-founder and CEO of Figure, remarked:
“Hamilton Lane understands the access, convenience and cost savings resulting from the Provenance Blockchain, and we are proud to work with them to upend the financial services industry. This collaboration is ideally timed to combine the expertise of the Hamilton Lane and Figure teams to uncap the potential of blockchain.”
With this announcement, Hamilton Lane “joins 15 other funds and Special Purpose Vehicles to offer blockchain-native vehicles on the DFS platform, though PAF is the first-ever 40 Act Fund focused specifically on the private markets.”
Figure will “continue to work with industry participants and the managed fund community to best leverage blockchain technology across all fund types and life cycles.”