As an advisor to both Tradfi and Crypto Native Firms is a trend I am excited about, the potential of blockchain and tokenization to help asset leaders earn the next generation of investors.
These financial institutions are proud to navigate complexity and pursue innovative strategies. They manage trillion across private equity, credit, venture and real assets. But for all their sophistication in portfolio construction, many are still dependent on infrastructure that is better suited to the fax machine era.
Investor registries are stored in spreadsheets. Capital call goes beyond E -mail. Waterfall calculations are performed manually. LPS gets quarterly PDFs and a little else. The technology stack under these companies is fragile, opaque and overdue for a serious upgrade.
Blockchain is not a speculative detour; It is a modern economic operating system. And for asset managers, it not only provides an opportunity to modernize fund administration and operations, but also to unlock new boundaries in product offers to better earn their existing and future customer base.
Modernization of fund infrastructure
The average investment company still depends on a bunch of administrators, custodians and transfer agents, each working from their own systems and reconciliation items in the hand in each phase of a fund’s life cycle: start, setup, fundraising and onboarding, operations, trade and liquidity and closure. Since much of this process is manual and tailor -made, errors occur, delays are common and transparency are low, while the cost of compliance and administration continues to rise.
Blockchain and tokenization solve these inefficiency by standardizing workflows across multiple participants. A permitted headbook shared between GPS, LPS, fund administrators, transfer agents, accountants and more may become the only source of truth for investor accounts, capital streams and transaction history. Instead of fragmented systems, silent information and weekly reconciliation, everyone operates from the same data, updated and visible in real time.
Smart contracts can automate capital calls, distributions and even complex waterfall logic, ensuring that the correct payments go to the right counterparties, instantly and transparent. And tokenization and interoperability of different asset types can enable automated, immediate settlement. No PDFs, thread delays and human error.
These are not gimmicks – they are operational upgrades. Investors may possess digital fund shares, settle redemptions in stableecoins and track dividends in real time. For cash control it is a game election. For operational teams, it means fewer bottlenecks and cleaner audit paths.
Blockchain and tokenization are not just about liquidity, but an opportunity to replace an unclear patchwork of systems with a streamlined, programmable foundation for fund operations.
The next generation of investment vehicles
If blockchain is already modernizing fund infrastructure, the next border is even more exciting: using the technology to build products that couldn’t exist before.
Start with tokenized private credit. Just look at Apollo’s Tokenized Private Credit Fund, which has moved more than $ 100 million on-chain and at the same time exists on multiple blockchains, making it interoperable with digital custody systems. Or, Franklin Templeton’s Benji platform, where tokenized money market funds live across several blockchains, allowing its investors to transfer shares peer -to -peer with stableecoins, earning intraday outcomes for the other and access tokenized money -market’s liquidity. Meanwhile, Blackrock’s tokenized institutional money market fund has already surpassed $ 2.5 billion aum a year after launch.
These products offer more than operational improvements; They allow fractional ownership, secondary liquidity and a radically more accessible wrapping for investors who want exposure to these products without commitment to a traditional LP structure.
The most forward-looking companies go even further: to build brand new kinds of on-chain products. Take on-chain prount vaults, a relatively new primitive in crypto that is like a self-equipping investment strategy.
Companies like Veda Labs are groundbreaking smart contracts that are included in tokenized assets, selling covered calls, borrowing for protocols or arbitrage rates across defi, allowing institutions such as asset managers to offer the white mark, labeled investment strategies that automate the execution while integrating compliance and fees directly into the protocol. No spreadsheets or intermediaries, just compose, auditable investment products built for digital-native allocers. Instead of relying on opaque NAV calculations, returns can be verified on-chain.
In short: This is a new category of investment product. More transparent than an ETF, more automated than a hedge fund, and infinitely more programmable than any older wrapping.
The time to build is now
Asset leaders do not have to give up what they are good at. But they need to modernize how and what they deliver.
Blockchain is not a threat to private markets; These are the upgraded private markets have been waiting for. One way to clean up the back-office complexity, lower operational risk and serve clients with products that are faster, smarter and more productive.
The tools are ready. The infrastructure is live. And the first movements have already shown what is possible. Asset leaders who ignore this innovation risk, which will be back-for while others still send capital calls via email, the next generation of investment platforms is already being built: on-chain, in real time and on scale.
