Private markets investment firm Hamilton Lane (NASDAQ: HLNE) has teamed up with digital securities exchange ADDX in order to tokenize a class of shares “issued by Hamilton Lane Global Private Assets Fund, to enable access to the private markets for a broader set of investors in Asia.”
The partnership reportedly marks “the first time Hamilton Lane has tokenized a fund, making it one of the earliest major private markets firms to do so and reflecting the firm’s long-standing commitment to innovation and expansion of investor access to the asset class.”
Hamilton Lane’s GPA Fund will be “accessible to ADDX investors at a minimum ticket size of $10,000, compared to the minimum of $125,000 or more for investors who subscribe via traditional, non-tokenized distribution channels.”
ADDX claims that it is one of Asia’s largest private market exchange. Its individual accredited investors “come from 39 countries spanning Asia Pacific, Europe and the Americas (except the U.S.).”
Over half of these investors are from Asia. The platform “automates manual processes in the issuance, custody and distribution of private market products, through the use of blockchain and smart contract technology.”
The resulting efficiency from tokenization “allows ADDX to fractionalize investments in a scalable and commercially viable manner.”
Launched in May 2019, the GPA Fund has “returned 16.11% (net) annualized since inception and has assets of more than $1.845 billion as of 31 January 2022.”
Underlying assets in the open-ended fund are “composed primarily of direct equity and secondary investments, along with direct credit.” To date, the Fund has “invested in assets across nine industries, with about half of its deals within the information technology and industrials sectors.”
The remaining exposure “consists of investments across a variety of sectors, including healthcare, energy and communications.”
Because of its relationships and expertise developed over 30 years in the private markets, Hamilton Lane claims that it has access to “a robust and proprietary deal pipeline, which enables its investment team to cast a wide net but be highly selective.”
Further, the company is reportedly is one of “the world’s largest investors and allocators of capital to the private markets, having deployed approximately $37 billion in capital in 2021.”
Hamilton Lane Vice Chairman and Head of International, Juan Delgado-Moreira, said:
“Hamilton Lane is dedicated to providing access to the private markets for a broader set of investors, and to doing so without some of the headaches that have historically been challenging for smaller investors. We seek to partner with firms that deliver transformative technology designed to drive our industry forward, and are excited to offer our investors access to GPA through this new platform.”
ADDX CEO Oi-Yee Choo remarked:
“Many investors don’t realize that the private markets are much larger than the public markets. Globally, more than 90% of companies with an annual turnover of US$100 million or more are private. For any investor, leaving private equity out of your portfolio essentially means turning one’s back on the vast majority of investment opportunities in the market. At a time of unprecedented volatility and declining returns in the public markets, diversification into the private markets is more important than ever.”
Ms Choo added:
“We know the value private equity can bring to investors’ portfolios. The only missing link thus far has been the lack of access to such assets for most individual investors. With tokenization and fractionalization, ADDX is committed to plugging that gap. In doing so, we are pleased to partner with Hamilton Lane, a well-respected, world-class name in alternative investments.”
ADDX became licensed by the Monetary Authority of Singapore (MAS) as “a private market exchange in February 2020.”
Since then, ADDX has “listed 26 deals on its platform involving blue-chip names such as Investcorp, UOB, CGS-CIMB, as well as Temasek-owned entities Mapletree, Azalea and SeaTown.”
Asset classes available on ADDX “include private equity, venture capital, private debt, real estate, hedge funds, funds with cryptocurrency exposure, and structured products.”
The platform’s draw, for issuers, is that “it provides access to previously untapped capital pools and reduces both the cost and minimum threshold of fundraising projects.”
