Private credit funds are managing liquidity pressure from slower exits, closer scrutiny of valuations, concerns about loan quality, and the interest-rate environment.
This comes as wealth managers, family offices, and high-net-worth individuals seek greater exposure to the asset class, with greater expectations around access to their capital.
Tokenised share classes offer another route for transferring fund interests without requiring the fund to redeem them or sell portfolio assets. Yet issuing a token is only the first step. The value depends on whether buyers can be found, prices agreed, and transfers completed through market infrastructure.
What the 2% result tells us
Our 2026 research, Tokenisation gaining altitude, surveyed 100 fund management executives. It found that 63% saw the greatest investor interest in tokenised products coming from high-net-worth individuals, while 42% named broader investor access as the main reason for pursuing tokenisation.
Only 2% named limited secondary-market liquidity as their external obstacle to tokenisation, the lowest result recorded. Managers placed implementation costs, common market standards, cyber risk, and regulatory uncertainty above it.
The technology provides a means of transfer, but does not supply buyers, distribution, price formation, or trading activity. These questions should be addressed when the structure is designed.
Another liquidity mechanism, not a replacement
Private credit managers already use redemption windows, tender offers, cash reserves, credit facilities, and secondary sales to manage liquidity. Each has limits: redemptions may require a fund to retain cash; high volumes can force asset sales or restrict withdrawals; credit facilities add expense; and tender offers depend on available capital and the fund documents.
Traditional secondary transfers allow one investor to sell an interest to another without requiring the fund to dispose of loans. They can still involve paperwork, individual approvals, uncertain pricing, and a limited pool of eligible buyers.
A tokenised share class records and completes such transfers as a digital token through distributed ledger technology (“DLT”), with rules governing investor eligibility, transfer restrictions, and transaction approvals.
An investor can transfer the interest to another approved investor through a secondary venue, subject to the fund terms and applicable rules. The fund does not have to redeem the interest, separating an investor’s exit from portfolio-asset sales.
A tokenised interest may be capable of transfer at any time. That does not mean it will always find a buyer, trade at net asset value, or settle at a price acceptable to the holder.
Regulatory gaps have practical consequences
Our research found that safekeeping and custody requirements and record-keeping rules for distributed ledgers were each selected by 46% of respondents as one of the two areas most in need of greater consistency across markets. Cross-jurisdictional alignment followed at 37%.
A tokenised share class may involve multiple parties across jurisdictions. Each needs certainty about which ownership record has legal effect, who is responsible for safekeeping, and which rules apply when an interest is transferred.
Clearer rules make tokenised structures more feasible, but they do not create a secondary market. Regulatory permission to issue a tokenised interest does not, on its own, resolve how that interest will be distributed, traded, settled, or administered.
What managers should establish before launch
The first question is whether a credible market for transfers exists. Managers need to know who can acquire the interests, how investors will gain access, and how prices will be set. A functional venue with few participants provides transferability, but little practical liquidity.
The digital ownership record must also connect with the fund’s legal register, valuation cycle, administration, and reporting. Parallel records requiring repeated manual checks can add cost and operational risk.
Permissioned standards such as ERC-3643 can link holdings to verified on-chain identities. Smart-contract rules can restrict transfers to eligible investors, while the issuer or transfer agent can recover or reassign tokens where required.
Managers also need arrangements for wallet security, transaction approval, cash settlement, and connections between blockchain networks. Each participant must know who has authority to approve, block, correct, or reverse an action.
Credit remains credit
Tokenisation changes the form in which a fund interest is recorded and transferred. It does not improve the borrower, strengthen underwriting, or change the value of the loan portfolio.
Tokenised share classes should form part of a broader liquidity plan that accounts for the portfolio, fund terms, investor communication, and the market for transfers.
Apex Digital 3.0 supports tokenised fund structures from issuance through ongoing administration. Its single-source model connects tokenisation technology with investor onboarding, digital transfer agency, fund administration, and access to primary and secondary distribution channels.
Download our flyer, Tokenised share classes for private credit funds, to learn how tokenised share classes can support a broader liquidity strategy.
