Despite its evolution over the years, the private funds industry remains rife with inefficiencies and barriers to entry for the vast majority of investors. A potential way to break through that morass is to tokenize certain tangible assets (e.g.
, real property) on the blockchain. Proponents of the technology tout the streamlined operations, oversight and compliance requirements offered by the blockchain, as well as how fractionalizing those tokens can open the industry to a larger swath of accredited investors. A recent white paper co‑authored by the Chartered Alternative Investment Analyst (CAIA) Association, BNP Paribus Asset Management (BNPP AM) and Liquefy, a licensed financial technology platform, explored some of those concepts. In addition, CAIA hosted a complementary webinar moderated by Jo Murphy, managing director at CAIA, and which featured Emmanuelle Pecenicic, digital transformation manager of BNPP AM; Adrian Lai, CEO of Liquefy; and Jack Wu, director of CAIA. This second article in a two-part series posits ways the real estate and private debt sectors can benefit from tokenization, as well as projections of the future of blockchain technology in the alternative investments industry. The first article
highlighted key drivers of tokenization, broad benefits it offers and ways it can be used in the PE industry. For further coverage of CAIA programs, see “How Hard Is Brexit Expected to Impact Alternative Fund Managers?
” (Dec. 13, 2018); and “How to Prepare for the Technological Revolution’s Transformation of the Private Funds Industry
” (Apr. 5, 2018).