In a move that highlights the growing intersection between traditional finance (TradFi) and blockchain technology, Hamilton Lane, one of the world’s largest asset managers, has announced the launch of a private credit fund on Solana (SOL). blockchain.
The fund, called Senior Credit Opportunities Fund (SCOPE), will now be accessible to investors via the Solana network, according to a recent report by Fortune.
Institutional Fund Directly on Solana Blockchain
Hamilton Lane, which has more than $290 billion in assets under management, has partnered with Libre, a Web3 protocol developed by Brevan Howard’s WebN Group and Nomura’s encryption firm Laser Digital to facilitate this initiative.
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According to Fortune, Libre will serve as the “backbone infrastructure” enabling the issuance and distribution of tokenized real-world assets (RWAs) on-chain. With this, Hamilton Lane aims to expand its distribution channels and reach a wider range of investors, including the “mass affluent” and crypto-native traders.
Avtar Sehra, CEO and founder of Libre, emphasized that Solana’s “low latency and high throughput capabilities” make it an ideal network for tokenization.
Interestingly, this move marks a significant milestone for the Solana ecosystem as it is the first institutional fund to launch directly on the blockchain, with the potential for more to follow as RWAs have been a growing investment vehicle for institutional investors to capitalize on cryptocurrency technology over the past year.
Financial inclusion through tokenization?
Hamilton Lane’s foray into blockchain technology is not entirely new, as the company previously tokenized SCOPE and a stock fund using the Securitize digital securities issuance platform.
Victor Jung, Head of Digital Assets at Hamilton Lane, expressed satisfaction with the inflows generated by these efforts. However, he heralded the launch of Solana as a critical step for the company, enabling the tokenization of collateralized loans. Jung said:
This is for decentralized finance natives. We believe this is just the beginning of a portion of the financial asset class that will be available to a new audience with a different risk-return profile.
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Similarly, proponents of these initiatives argue that the tokenization of financial assets will modernize and democratize conventional financial markets.
BlackRock CEO Larry Fink, for example, has expressed his belief that the next step in the industry will involve the tokenization of all stocks and bonds, envisioning a future where all financial assets reside on a unified ledger.
While tokenized private credit has gained traction, Fortune reports that some challenges remain. Startups like Maple and Centrifuge have struggled to sell to crypto investors due to factors such as long lock-up periods and the variable risk appetite of this specific audience.
Additionally, some crypto investors prefer the higher returns offered by meme coins, which can overshadow the more modest returns of traditional assets over a longer time horizon.
At the time of writing, SOL was trading at $173, down nearly 5% over the 24-hour period, led by Tuesday’s broader market decline.
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