Jamie Finn is co-founder and President of Securitize.
What were the key theme(s) for your business in 2023?
In 2023, the private credit sector experienced exponential growth, reaching a valuation of $1.5 trillion. Securitize entered the private credit arena in May through a collaboration with Hamilton Lane for a feeder fund, facilitating access to the Hamilton Lane Senior Credit Opportunities Fund (SCOPE), an enduring private credit fund. This initiative provides a unique prospect for individual investors to participate in this expansive and emergent financial domain.
Our intention was to provide a reliable investment option with a targeted 8-10% return. Unlike traditional approaches, where substantial commitments ranging from $250,000 to $2 million were required, we made it possible with a $10,000 buy-in. This allows investors access to institutional share classes typically associated with a minimum investment of $5 million.
What was the highlight of 2023?
In 2023, Securitize achieved several milestones within the industry that will have a wide reach on the digitization of private markets. In addition to the Hamilton Lane SCOPE fund mentioned above, Securitize also launched another fund for individual investors in January: Hamilton Lane’s flagship direct equity fund (Equity Opportunities Fund V) through a Securitize feeder fund tokenized on Polygon.
In July, the company initiated the issuance of tokenized securities in Europe, establishing Securitize as the first entity capable of issuing and trading tokenized securities in both the United States and Europe. This distinction was particularly noteworthy as it marked the first instance of such activities conducted under the European Union’s pilot regime for digital assets. We’re looking forward to the opportunity this will provide European businesses, who will now have a new way to raise capital and obtain liquidity through secondary markets as well.
In August, Securitize completed the acquisition of Onramp Invest, a move that streamlines accessibility for registered investment advisors (RIAs) to premium performing private equity, private credit, and secondaries asset classes. This enables RIAs to promptly extend investment opportunities to their clientele across these sectors. Onramp’s platform currently caters to a community of RIAs collectively representing $40 billion in cumulative assets under management so this is another example of our commitment to advancing investor access to high-performing alternative assets.
What are your expectations for 2024?
We’re optimistic the momentum behind real-world asset tokenization will continue in 2024. According to a Boston Consulting Group report, the tokenization market could hit $16 trillion by 2030. Larry Fink, the CEO of BlackRock also sees the opportunity, calling tokenization “the next generation for markets.”
It’s not just big names endorsing it; everyday investors are showing interest too. Ernst & Young found that a solid 55% of high net worth investors are hungry for better access to alternative investments. That’s a significant shift in a market worth trillions, offering returns that outshine the public markets. We’re excited to watch this new tech unfold, opening up fresh opportunities for investors to dive into those attractive returns.
Private credit will also continue to be red hot. With regulatory constraints prompting banks in the U.S. and Europe to tighten lending, a significant need for capital has emerged. Industry leaders like Hamilton Lane and KKR have responded to this demand. Our objective is to broaden access to these dynamic products for a more extensive investor base.
Looking forward, we are working to bring a mix of additional products to market which will offer different risk / return profiles based on investors needs.
