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Fund managers believe alternative asset classes are first in line for tokenisation

Wednesday, March 30, 2022
Opalesque Industry Update - Private equity and hedge fund assets are the most likely to see relevant levels of tokenisation as the market begins to build, new global research from tokenisation platform Token City shows.

The study, conducted among fund managers in France, Spain, Germany, Switzerland, and the UK who are responsible for around $546.5 billion in assets under management, found 73% identified private equity assets and 65% pointed to hedge fund assets as most likely to be the first to see significant levels of tokenisation.

The World Economic Forum estimates that up to 10 percent of global GDP will be stored and transacted via DLT by 2027 and that tokenized markets could potentially be worth as much as USD24 trillion by 2027.

Madrid-based Token City's research shows most fund managers (93%) believe alternative asset classes are more likely to be targeted for tokenisation because of their lack of liquidity, transparency, and accessibility by comparison with traditional asset classes.

Private equity and hedge fund assets are out in front as the alternative asset classes regarded as most likely to be the first to attract relevant levels of tokenisation - however 58% point to private debt and more than half (55%) identify venture capital assets as strong areas for growth. Around 41% say real estate could be the first sector to see significant levels of tokenisation while just 8% point to infrastructure.

Token City founder and CEO Yael H Oaknin said: "Fund managers are starting to focus on the potential uses and benefits of tokenisation and see alternative assets as having the most potential. The benefits for funds of improving liquidity, transparency and accessibility make tokenisation really attractive".

Token City supports investors and organisations wanting to evaluate the market in a safe and secure way. It provides the platform infrastructure and comprehensive services required to issue, manage, and trade Security Tokens.

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