KKR jumps into Avalanche for PE offering
On Tuesday, global investment firm, KKR & Co, announced a partnership with digital asset management firm, Securitize, to tokenise its private equity fund “Health Care Strategic Growth Fund II” on Avalanche, a public blockchain network. KKR offers alternative asset management, capital markets and insurance solutions to its clients. Securitize manages and tokenises institutional-grade products, leveraging blockchain based capital markets and financial solutions.
Commenting on the development Securitize CEO, Carlos Domingo, said:
This new fund is an important step toward democratizing access to private equity investments by delivering more efficient access to institutional-quality products…Tokenization has the potential to address many of the biggest challenges for individual investors seeking to participate in private market investing by enabling technological and product innovations that were not possible before.
The Health Care Strategic Growth Fund II is a $4 billion fund and invests in growing healthcare companies in North America and Europe. The development is facilitated by Avalanche, an eco-friendly smart contract platform based on proof of stake technology. Investors in the new fund will have to hold the security for at least a year prior to selling it to other qualitied purchasers on a secondary market managed by Securitize. Tokenising private equity investments should allow individuals to access investments in smaller amounts, enhance operational efficiency and facilitate greater liquidity.
Managing Director and Co-Head of KKR, Dan Parant, commented on the partnership:
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… We’re excited to be working with Securitize to be an early adopter of this technology and look forward to opening our investments up to a new audience of investors.
KKR's new partnership follows a string of recent announcements by institutional players who are looking to leverage the benefits of blockchain technology for clients and enhance their digital assets offerings, such as State Street, Blackrock and Barclays. Despite the onset of crypto-winter, institutional interest in blockchain technology continues to grow unabated.