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đ” Hamilton Lane is Tripling Down
November's updates from the STA team
Security Token Advisors
November 01, 2022
In this month's edition of The ReCap we'll be covering:
Industry Updates: Partnerships around the world
Real Estate News: The institutions have spoken
Wall Street Adoption: Hamilton Lane is tokenizing 3 US funds
Vendor of the Month: Rialto Markets
Advisor of the Month: Kyle Sonlin
Client Spotlight: Freeport
Marketing STOs 101: Creating your ideal investor persona
Announcements: FREE Master Class 11/2 8am EST
But first...
Hello tokenizers!
Weâre rolling into the final months of the year with what I think will be a vocal finish with numerous more major industry and tokenization announcements to come. Securitize scored another big win with Hamilton Lane and we saw Prime Technologies receive FINRA approval to start brokering security tokens.
Also Templum preparing to list the $100M+ Thesis Hotel (Case study here) is yet another boon for the space. We also had a great time at the Propy Conference at the Miami Beach Convention center which showed that the space is heating up with quality Real Estate professionals learning and starting to tokenize property and CRE.
And a shoutout to Top Floor where more than 20 individuals came to learn about tokenization at our in person Masterclass in Houston, TX. Catch our virtual session with myself and Head of Consulting, Alec Beckman, on Wednesday at 8am EST. Here is to another month of major progress!
Happy Tokenizing!
Founder and CEO, Security Token Advisors
ââSecurity token platform Tokeny officially announced a partnership with Assetera. Tokeny will become compatible with DINO a global distribution network for tokenized access. Additionally, this will provide European investors with access to security tokens and greater liquidity. Tokeny clients will now be able to issue and manage digital assets and migrate them to a regulated trading venue. This announcement follows an Tokenyâs partnership announcement with Ownera last month. Tokeny is making significant moves and will be a great company to watch develop further.
Deutsche Börseâs digital post-trade platform D7, has executed the first digital securities issuance in the country. The platform aims to provide a fully digital alternative to conventional issuance for around 80% of German securities, including warrants and certificates, with further asset classes and jurisdictions planned in the future. This announcement is a great development for digital securities in Europe and a large milestone for Germany.
Berner Kantonalbank is onboarding to Switzerlandâs SIX Digital Exchange (SDX), the world's first fully regulated FMI digital asset exchange. As a first transaction will issue daura participation certificates. The collaboration between SDX, BEKB and daura will enable small and middle size enterprises to issue their shares digitally in the form of uncertificated securities or DLT-securities. Daura will be the first user of this model by issuing participation certificates which will be made available in the banking system through BEKB, these shares will then be registered on the SDX CSD. David News, head of SDX said both companies are pioneers in the digital asset space and now, with SDX, together they are building an ecosystem for small and medium enterprises. This news continues the significant amount of activity happening in europe this past month.
By Alec Beckman
Santander, the Spain-based bank, has presented a project to use tokenization in tandem with the digital real, the proposed Brazilian cryptocurrency, in order to facilitate property transactions. The proposal, part of the LIFT challenge, would be focused on simplifying the sale of real estate properties and cars for the Brazilian population.
BNY Mellon, the worldâs largest custody bank, has released the results of a recent survey it commissioned that asked 271 institutional investors from around the world about their adoption of digital assets, including their priorities, challenges faced, and the opportunities that lay ahead.
The study found that for institutional investors, issues like trust, asset safety, regulatory clarity and institutional-grade services âare critical for sustained adoption of digital assets.â They also value âintegrated services for digital and traditional assets, across the investment lifecycle,â according to the report.
Seventy percent of the institutions surveyed indicated that they would increase their digital asset activity if services like custody and execution were available from recognized, trusted institutions. 88% signaled that they are moving forward with their previously determined plans despite the market downturn.
The vast majority (91%) of institutional investors are interested in investing in tokenized products but are looking to do so in a safe and compliant manner. A majority of respondents (88%) also indicated that they are comfortable with the digital representation of cash, also known as stablecoins.
Nearly 97% indicated that tokenization would ârevolutionize asset managementâ and âbe good for the industry,â highlighting such improvements as faster settlement times, increased liquidity, and increased accessibility for all investors to asset classes like private equity funds and real estate.
Last monthâs edition was dominated by KKRâs foray into the security token space with the likes of Avalanche and Securitize. We even wrapped that section up with the following tidbit:
âThe STA team will be covering other comparable, institutional-caliber offering structures in more depth this quarter. There is no lack of ammunition on that front, as big-time players like Hamilton Lane, abrdn, JP Morgan, and Goldman Sachs continue to expand their range of investments into tokenization, and will likely make use of these new portfolio companies to bring their own tokenized products to market.â
Maybe not-so-coincidentally, the first name in that final sentence is now taking the limelight for itself. Hamilton Lane, who already has a tokenized private investment fund available with Singapore-based ADDX, announced three new tokenized fund rollouts withâŠSecuritize. This will be Pennsylvania-based Hamilton Laneâs entrance into the US security token markets, and is perhaps something that was just waiting on validation from another high-caliber firm.
Joining the $2.2 billion Global Private Assets fund available to ADDX investors and users, Hamilton Lane announced that the three US funds will include:
Private Credit
Direct Equities
Secondary Transactions
The general industry estimate is that KKR will aim to raise between $30 and $50 million for its healthcare feeder fund. Drawing from that, Iâd deem a $20 million mark for each Hamilton Lane fund to be successful enough as a collective proof-of-concept within the current state of the tokenization industry. That would put this set of products over the $100 million range and provide confidence to other comparable asset managers and prospective products in the $20 to $30 million range - let alone confirm confidence for additional product rollouts through KKR and Hamilton Lane directly.
While we love to see retail activity and niche products come to market, the fact of the matter is that the tokenization markets, platforms, Alternative Trading Systems, and broker-dealers need to cover the map. Seeing these additional âaccredited investorâ or âqualified purchaserâ products coming to market is a good thing, even if still not available to the Average Joe investor, as it has a greater likelihood for money to flow this way. Keep an eye on the KKR and Hamilton Lane deals and involved names. Theyâre likely to contain some additional firepower in the near-to-medium term future.
The team at Security Token Advisors is excited to highlight Rialto Markets, a fully-licensed and operational Broker-Dealer/Alternative Trading System, and congratulate them on the official launch of the primary marketplace. The marketplace currently has 17 live offerings totalling $450+ million in targeted capital raised, and spans issuers across BioTech, pharma, commodities, and energy.
Rialto offers solutions for issuers looking to white-label BD/ATS services and one-off issuers raising capital alike, and are striving to solidify themselves in the private assets and blockchain-based securities world. We are excited to keep an eye on new listings and deals coming through the Rialto pipeline, and have enjoyed getting to see the teamâs work in action over the recent months.
Kyle Sonlin is an entrepreneur, advisor, and investor & most important he is the Co-founder of Security Token Group. He has developed a unique perspective through working with blockchain technology since 2015 and has spoken around the world as a thought-leader in the security token space since its inception.
Through working with startups as a consultant and investor, he has a keen eye for business development and specializes in management and fundraising through personal accounts and his network. With a finance and economics background, he provides technical experience to further evaluate business proposals, and has made successful investments in companies, as well as the stock and crypto-asset markets.
As a partner at Security Token Group, he works directly with issuers leveraging private securities exemptions, and currently leads the financial data and media platform, Security Token Market. As CEO of Security Token Market, he has built the largest ecosystem of security token offerings worldwide and developed a community of thousands of users who actively engage with the hundreds of offerings on the platform, participate in sourcing market data from over 100 exchanges worldwide, and produce content to drive adoption of the industry to retail audiences worldwide.
The company recently conducted the first ever Web3 crowdfunding campaign for a security token, reaching investors around the world. He is also a host of the Security Token Show, the leading industry program breaking down the latest industry trends and market movers around the world to over tens of thousands of dedicated listeners, published each Monday on YouTube, Spotify, Apple Podcasts and other streaming platforms.
This month we're excited to highlight one of our current clients: Freeport! Freeport is fractionalizing ownership of gallery-quality art, such as original Andy Warhol paintings, through tokenization on their platform.
They'll be using RegA+ to raise capital for these paintings, from both accredited and retail investors, and enable a secondary trading marketplace with no seasoning/lockup period. Investors will be able to invest into high-barrier-to-entry art while being able to actively manage their portfolios!
Here's a quick use case: Imagine an Andy Warhol was valued at $5M across 1M tokens, that's $5/token. After the initial raise closes, anyone still wanting to invest and current investors looking to increase their allocation can do so on the secondary market. Because secondary markets are driven by token supply and investor demand, it's possible for the $5 token to increase to $7, a 40% increase which investors can decide to take advantage of and sell some or all of their tokens.
Should the price drop investors can then buy in if they'd like and lower their overall cost-basis from their original $5/token and hold for long term. Either way the investor has the power to control holding periods and decision-making rather than waiting for the art to sell or see an exit.
*Please note that these are simply sample conceptual cases and do not guarantee that the tokens will trade accordingly.*
Freeport will be officially launching in Spring 2023 and they already have over 350 people on their waitlist. Want to sign up and keep up to date with their platform? Sign up below!
Creating Your Ideal Investor Persona
It may sound obvious, but before you start reaching out to a list of potential investors you need to start with what your ideal investor looks like.
Just as you would with potential leads, youâll want to define who you are âselling & marketingâ to & getting VERY detailed usually helps.
Having a deep understanding of who you want to raise from will help as you put together investor decks, emails, and other fundraising documents. If done right, investors can be far more than a surge of capital and can offer relevant experiences, networks, and mentorship.
Here are the most important things to consider while creating your investor persona:
Location â Where is your offering located? Do you need local or international investors? Are you looking for connections and networks in strategic geographies?
Industry â What type of company are you? Who would benefit more from your offering? Where should your future investors/partners be focused? Where do you fit into the blockchain world?
Offering Focus â What is included in your STO offering? What type of Security Tokens are you offering? What platform is your offering on? Do you have any legal restrictions? What barrier to entry may potential investors have?
Motivators â What do you want to get out of your investors and what do they want to get out of you? Do your investors need to match your values & culture?
Deal Momentumâ Are you in need of capital as soon as possible? Or are you taking your time and looking for strategic investors? Do you need capital to launch your STO successfully?
Your ideal investor profile should remain dynamic as your company continues to grow. Note: Its important to take a look back once a quarter or every 6 months to iterate and make necessary changes as your company grows & changes.
Also it's important to note that an STO is a relatively low-risk investment option backed by SEC regulations. As more regulators actively engage with the cryptocurrency market, security tokens will emerge as the big winners since they combine the best of both worlds. Further, there is a void in the crypto market for products that cater to less âadventurousâ investors who demand stability and increased security.
2021 was without a doubt the year of the NFT but it started to bring more attention to the public of what exactly a âsecurityâ is and as a result of all these factors, security tokens are expected to grow into a $167 trillion market by 2030.
If you need help building your investor personal or with Investor Relations for your STO please send us an email:
Jessica Burns, Head of Investor Relations & Marketing, Security Token Advisors: [email protected]. (305) 804-1964.
Summary: The trading of private assets on secondary markets is one of the core drivers in the blockchain-based securities industry. There's some variance in the processes, and these models break down the elements for consideration, along with the legal distinctions for how to actually trade private assets compliantly.
Summary: The year is 2023, and the crypto markets have tanked yet again, taking many personal fortunes with them. You, however have gotten out in time or have funds put away to get a new investment at the firesale price, how do you determine which are worth your investment, and which will continue to be worthless in the long run? Letâs take a deeper dive into evaluating five key value-propositions of future/current tech within the blockchain industry as a whole.
ANNOUNCEMENTS:
FREE Masterclass: The Future of Real Estate Investing
Want to know the ins and outs of how tokenization affects real estate? CEO Herwig Konings and Head of Consulting Alec Beckman will be giving a free masterclass to anyone interested this Wednesday at 8am EST.
If you can't make it, no worries! Sign up and the recording will be sent to you afterwards!
Real Estate Tokenization Course: Sponsored by Oasis Pro Markets
Our self paced course guides you through the tokenization of real estate, from the basics of blockchain to regulation and liquidity. This course also comes with case studies and webinars with industry leaders!
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