Securitize Launches Fund Providing Tokenized Exposure to KKR Fund for the First Time in the U.S

Rhea-AI Summary

Securitize has launched a fund that tokenizes KKR’s Health Care Strategic Growth Fund II on the Avalanche blockchain, enhancing access to alternative investments for individual investors. This is the first time KKR’s private market strategies are available digitally in the U.S. The fund lowers investment minimums and promises improved investor onboarding and liquidity. KKR’s collaboration with Securitize signifies a progressive shift towards digital financial products, addressing challenges in private market investing. The fund complies with SEC regulations and focuses on innovative health care companies in North America and Europe.

Positive

• Launch of tokenized fund providing access to KKR's health care investment strategy.
• Improves accessibility for individual investors into private market investments.
• Offers lower investment minimums, enhancing investor participation.
• Compliance with SEC regulations under Reg D 506(c).

Negative

• None.

New Fund Unlocks Broader Access to Alternative Investments Through Digital Ownership on Blockchain

NEW YORK--(BUSINESS WIRE)-- Securitize, a leading digital asset securities firm, today announced the launch of a fund tokenizing an interest in KKR’s Health Care Strategic Growth Fund II (“HCSG II”) on the Avalanche public blockchain. This is a major step toward making institutional private market strategies more accessible to individual investors.

The new Securitize tokenized fund (the “Fund”) marks the first time exposure to one of KKR’s alternative investment strategies has been offered in a digital format in the U.S. The Fund is managed by Securitize’s digital asset management arm, Securitize Capital, and provides exposure to KKR’s health care growth equity investing strategy.

Historically, investments in private market funds have been primarily available to large institutional investors and ultra-high-net-worth individuals. Unlocking broader access to private market investing has been a long-standing challenge for the industry.

Tokenization helps solve for this by enabling technology to deliver lower investment minimums, improved digital investor onboarding and compliance protocols, and increased potential for liquidity through a regulated alternative trading system.

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

KKR’s adoption of blockchain is also a significant step in continuing to build a “blockchain bridge” from paper-based to digital financial products.

“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,” said Dan Parant, Managing Director and Co-Head of U.S. Private Wealth at KKR. “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.”

The Securitize tokenized fund is offered under SEC Reg D 506(c) and Securitize is tokenizing the Fund on the Avalanche public blockchain. KKR’s HCSG II Fund, to which the Fund provides exposure, invests in innovative health care companies in North America and Europe with proven products and services that are seeking a partner to commercialize and scale.

Avalanche is an eco-friendly smart contract platform built for the scale of global finance. It features near-instant transaction finality, and a novel scaling technology that enables both institutions and individuals to build custom blockchains-as-a-service. Ava Labs is a team supporting the development of Avalanche, and projects building on the network.

“Financial markets demand innovation, and over the last two years we’ve seen dramatic leaps forward in the evolution of real world assets moving on-chain and delivering on the promise of breakthrough technology for institutions,” said John Wu, President of Ava Labs. “This strategic partnership will surely spur more blockchain activity among leading investment firms who are now equipped with both the technology and knowledge they need to form an impactful strategy.”

“Securitize is now a leading tokenization and distribution platform for investors and global asset managers,” said Wilfred Daye, Head of Securitize Capital. “The tokenized fund we have developed is a significant breakthrough in unlocking investor access to private equity investments.”

As a leading digital asset securities firm, Securitize is a leader in firsts: it operates the first and only end-to-end platform leveraging blockchain to raise capital, onboard investors, issue tokenized assets, and provide secondary trading; it launched the first credit-rated tokenized fund in Japan; and is the first blockchain-based firm to be a top 10 stock transfer agent.

About Securitize and Securitize Capital

Securitize is a digital asset securities firm with a mission to provide shareholders access to invest in and trade alternative investments, and for companies to raise capital, manage shareholders, and offer shareholders potential liquidity. Securitize has pioneered a fully digital, all-in-one platform for issuing, managing and trading digital asset securities, consistent with the existing U.S. regulatory framework, with a community of over 1.2 million investors and 3,000 businesses connected. Securitize is comprised of Securitize, Inc. and its subsidiaries Securitize, LLC and Pacific Stock Transfer (both SEC-registered transfer agents), Securitize Capital, LLC, Securitize Markets, LLC (an SEC-registered broker-dealer, member of FINRA and SIPC, and operator of the company’s alternative trading system). Learn more at http://www.securitize.io.

Securitize Capital is the first digital asset management platform that manages and tokenizes institutional-grade products, leveraging a blockchain-enabled capital market structure, tailoring innovative financial products that broaden investor access and exposure to alternative assets, cryptocurrencies, and emerging asset classes. Learn more at www.securitize.io/securitize-capital.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Avalanche

Avalanche is the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality. Avalanche is blazingly fast, low cost, and eco-friendly. Any smart contract-enabled application can outperform its competition by deploying on Avalanche. Don’t believe it? Try an app on Avalanche today. https://www.avax.network/

Disclosures

Private market investments are speculative and considered risky, including potential loss of your investment, and may not be appropriate for every shareholder. Private investments are generally an illiquid asset class; shareholders cannot sell their funds when they want to without potentially facing high losses. Any discussion of liquidity is purely speculative. Past performance is not indicative of future results.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220913005384/en/

Media

Securitize: Evan Wagner, evan.wagner@securitize.io

KKR: Miles Radcliffe-Trenner, media@kkr.com

Ava Labs & Avalanche: Patrick Sutton, patrick@avalabs.org

Source: KKR

FAQ

What is the new fund launched by Securitize related to KKR?

The new fund tokenizes KKR’s Health Care Strategic Growth Fund II, allowing broader access to alternative investments through the Avalanche blockchain.

How does the new tokenized fund improve investment opportunities?

It lowers investment minimums and enhances digital onboarding, making it easier for individual investors to access private market strategies.

What regulatory compliance does the tokenized fund adhere to?

The fund is offered under SEC Reg D 506(c), ensuring it meets U.S. regulatory standards.

Which markets does KKR’s HCSG II Fund focus on?

KKR’s HCSG II Fund invests in innovative health care companies in North America and Europe.