24 February 2020

Private equity tokenization

  

Private equity tokenization

 

Tokenization is mainly associated with the process of converting some form of assets into a token that can be issued, transferred, recorded or stored on a blockchain system (Distributed Ledger).

 

In the case of a private equity fund, the investor would be offered to subscribe tokens which would represent the units or the shares of the fund.

 

The tokenization of private equity fund brings various benefits such as:

  • Accessibility: Since the investments amounts and holding period could potentially be reduced, tokenization could broaden the investor’s base and bring more actors into the picture.
  • Enhanced liquidity: Since the tokens can be traded, the investors will be able to liquidate their positions more easily than in the generic private equity setup. It might also result in easier ways to finance projects through raising capital.
  • Better transparency: The token information will be display to public and can only be sold to entities having undergone a relevant KYC & AML as well as being recognize as sophisticated investors (or professional investors)

 

To find out more about tokenization and private equity please contact us

 

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