Hamilton Lane and Figure launch blockchain fund
Opalesque Industry Update – Figure Technologies, Inc. and Hamilton Lane are preparing to launch three new share classes of Hamilton Lane’s private market-focused funds registered under the Investment Company Act of 1940 that digitize the fund shares on the Provenance Blockchain using Figure’s Digital Fund Services platform.
Hamilton Lane, one of the largest private markets investment firms globally, first applied for the new share classes on 26 October 2022, for its Private Assets Fund. Hamilton Lane’s anticipated launch of the new share classes also marks the first time a firm has provided exposure to a private markets investment strategy under the 1940 Act through a blockchain-native share class, and is its latest significant step in transforming and reducing inefficiencies within the private markets industry.
As a 1940 Act registered fund, PAF is more accessible to qualified US investors, including certain individual investors, their wealth advisors, as well as institutions. It provides access to a diversified portfolio of private equity and private credit assets through a single investment – either through the traditional primary issuance process or via Figure’s DFS platform.
Hamilton Lane is initially using DFS to streamline the primary issuance process and plans to launch two more closed-end private market funds on the DFS platform in the coming months. Investors in the fund will also benefit from Universal Passporting, which allows investors to reuse their KYC/AML credentials when transitioning to new investments, reducing time, cost and friction. DFS uses the originating blockchain to perform traditional transfer agent functions such as cap table management, capital calls, distributions and shareholder communications. The Provenance Blockchain was purpose-built in a regulatory manner with the scale, security and cost structure required for financial institutions.
“We are thrilled to partner with Figure to provide yet another digital-first means for investors to access the private markets. Hamilton Lane was one of the earliest major private markets firms to tokenize a fund, and we remain committed to identifying innovative technology solutions as a means to address some of the traditional pain points in the asset class,” said Victor Jung, Head of Digital Assets at Hamilton Lane.
This is the latest development in support of the firm’s commitment to using technology to expand investor access to the private markets. The announcement follows other recent steps Hamilton Lane has taken to expand access to its Global Private Assets Fund as well as other closed-end funds it manages.
“Hamilton Lane understands the access, convenience and cost savings brought about by Provenance Blockchain, and we are proud to work with them to upgrade the financial services industry,” said Mike Cagney, co-founder and CEO of Figure. “This collaboration is ideally suited to combine the expertise of the Hamilton Lane and Figure teams to unlock the potential of blockchain.”
With this announcement, Hamilton Lane joins 15 other funds and special purpose vehicles to offer blockchain-based vehicles on the DFS platform, although PAF is the first ever 40 Act fund to be focused specifically on the private markets. Figure will continue to work with industry participants and the managed fund community to best leverage blockchain technology across all fund types and lifecycles.
