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Enhancing fund revenue in 2024: The impact of asset tokenisation on liquidity

03 May 2024

Bruce Jackson, Chief of Digital Asset Funds and Business

Asset tokenisation holds tremendous potential for transforming the fund management landscape in 2024 and beyond. By embracing this transformative strategy, you can unlock liquidity, expand market reach, and increase revenue opportunities for your fund products.

Four key insights into the power of asset tokenisation:

  1. Embracing digital distribution processes

    In the dynamic landscape of fund management, staying ahead of the curve is crucial for success. By leveraging tokenisation and automated digital distribution processes, you can empower your clients to sell more products efficiently. This innovative strategy not only streamlines operations but also opens doors to broader market reach and enhanced revenue streams.

  2. Transforming closed-ended products

    Tokenising closed-ended products can enhance their liquidity profile, effectively emulating attributes of open-end funds. The democratisation of alternative funds has taken a significant step forward with Apex receiving regulatory approval in Luxembourg. This approval allows us to oversee distribution (subscriptions/redemptions), onboarding, administration, and transfer agency tasks for alternative funds registered in Luxembourg, including using Distributed Ledger Technology (“DLT”) or blockchain as the registry system.

  3. Accessing digital investors

    In today's digital age, catering to digitally native investors is paramount. Tokenising open-ended products opens new avenues for accessing digital investors and expanding market reach. For instance, the creation of a digital share class for money market funds enables unit holders to earn a treasury return on their digital cash while using tokenised funds as collateral. Similarly, the digital share class of a UCITS fund facilitates distribution into digitally native wealth management accounts, enhancing accessibility and liquidity.

  4. Collateralising money market funds

    Tokenisation isn't just about accessibility, it's also about enhancing the functionality of fund products. By tokenising money market funds, you can unlock the potential for collateralisation, adding another layer of value and security for investors. This innovative approach enhances the attractiveness of money market funds while providing additional benefits for investors seeking stability and liquidity.

Work with us:

By partnering with us, you gain access to our comprehensive end-to-end platform for servicing digital assets. We provide a single-source solution for all structural and operational administration, comprised of an unparalleled range of services, industry-leading digital asset technologies backed by third-party providers, and a global team of experts across four dedicated digital asset Centre of Excellence locations.

Whether you’re an existing or a new client, we can help you overcome the challenges of managing digital assets funds. For crypto, digital hedge, and digital venture capital funds, our focus on governance, compliance, and risk management aims to reduce the burden of counterparty risk mitigation and enable you to focus on growing your businesses.

 

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