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KKR, a US Investment Firm, Has Tokenized a Private Equity Fund on the Avalanche Blockchain

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KKR & Co has teamed up with digital asset management firm Securitize to tokenize its private equity fund on a public blockchain network.

The partnership will enable the KKR to tokenize its second Health Care Strategic Growth Fund on the Avalanche blockchain, making it available to investors with at least $5 million in investable assets, according to an official press release.

The $4 billion growth fund invests in expanding healthcare companies in North America and Europe. 

Individual investors have shown increasing interest in the fund, according to Dan Parant, managing director and co-head of US private wealth at KKR.

He also mentioned that tokenized funds remove many of the barriers to accessing private equities for individual investors. Tokenized funds, for example, enable individuals to gain easy access to private equities while investing in smaller amounts.

“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,” Parant added.

Eligible investors will be able to purchase KKR’s growth fund through Securitize’s tokenized feeder fund on Avalanche. Investors must hold the security for a year before selling it to other qualified buyers on Securitize’s secondary market. 

Securitize CEO Carlos Domingo commented on the development: “This new fund is an important step toward democratizing access to private equity investments by delivering more efficient access to institutional-quality products.”

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Despite the fact that this is KKR’s first tokenized fund, the buyout firm has been relatively active in the crypto industry, recently backing a couple of crypto firms. 

In September 2021, the private-equity behemoth made its first blockchain investment, acquiring a stake in crypto-native investment and technology firm ParaFi Capital. The KKR took part in a $640 million fundraiser for the crypto-focused investment firm Dragonfly Capital in April.

KKR also intended to participate in the recently completed $100 million funding round for blockchain gaming powerhouse Animoca Brands, but was forced to withdraw due to the recent market crash.