KKR & Co. (Kohlberg Kravis Roberts & Co.) is making a part of its private-equity funds available on the Avalanche public blockchain. The move is an attempt by the investment firm to expand access to private investment vehicles. The business is collaborating with Securitize, a leader in digital assets, to tokenize a stake in the second iteration of KKR’s Health Care Strategic Growth Fund.
In January, KKR completed the $4 billion fundraising for its second Health Care Strategic Growth Fund. A $1.45 billion pool that was closed in 2017 served as that fund’s predecessor.
Eligible investors will most likely involve those with a minimum of $5 million in investible assets. Investors will need to create a digital wallet and sign up with Securitize. Once completed, investors will be able to invest in the KKR fund through a tokenized feeder fund. Additionally, investors will be able to sell the security to other qualified individuals on a secondary market run by a unit of Securitize after holding it for a year.
According to executives, KKR’s move will mark the first time in American history that a significant private equity firm has made a piece of a fund available on the blockchain.
According to Dan Parant, co-head of U.S. private wealth at KKR, individuals will be able to invest less money through tokenized funds than institutions would need to. Additionally, Securitize’s digital onboarding procedure will make the task of monitoring transactions and screening investors easier.
Why the Health Care Growth fund for the blockchain venture?
Parant stated that KKR had been investigating the use of blockchain technology for some time. However, the firm was awaiting for the space to mature. Due to the high level of demand from private investors, the company chose to test it with the healthcare growth fund. The fund supports fast-expanding healthcare enterprises in North America and Europe. Parant said that there has been significant investor interest in the strategy.
Carlos Domingo, CEO at Securitize, stated
“KKR has been so far the most innovative in terms of making the decision to do this, and we hope that a lot of other asset managers will take note.”