Brevan Howard, Hamilton Lane to tokenize assets through Libre protocol

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Brevan Howard and Hamilton Lane will be the first asset managers to tokenize assets on the upcoming Web3 infrastructure provider Libre protocol — backed by Brevan Howard’s WebN and Nomura’s Laser Digital. 

Libre is scheduled to go live in the first quarter of 2024, offering asset tokenization and smart contracts through the Polygon network, supporting collateralized lending and automated rebalancing of separately managed accounts (SMAs).

According to a Jan. 10 announcement, both Brevan Howard and Hamilton Lane have entered into a strategic partnership with Libre, seeking to improve access to alternative investments. “We believe that tokenisation has the potential to revolutionise the way investments are managed and traded,” said Victor Jung, head of digital assets at Hamilton Lane.

Alternative investments are financial assets that do not fall into the conventional investment categories of stocks, bonds, and cash. They often require higher minimum investments or longer holding periods compared to traditional investments and are usually less liquid. Some examples of alternative investments include real estate, private equity, private debt, infrastructure and hedge funds.

Tokenization, which refers to the process of converting rights to an asset into a digital token on a blockchain, has the potential to significantly impact alternative investments by increasing accessibility and liquidity, as well as allowing fractional ownership. Global bank Citi forecasts that the tokenization market will reach up to $5 trillion by 2030.

As for Brevan Howard, known for its focus on macroeconomic trading strategies, Libre will allow tokenization of its portfolio of illiquidity assets, whereas Hamilton Lane will use the protocol for fixed-income products.

“The tokenisation of funds allows us to offer investors a new way to access our strategies, providing them with optionality, and further develops our platform to serve client needs,” noted Natalie Smith, head of strategy and client partnerships at Brevan Howard.

Brevan Howard’s assets under management (AUM) were estimated to be between $35 and $40 billion in July 2023, while Hamilton Lane disclosed $854 billion in assets under management or supervision in September.

Institutional demand and regulatory compliance for asset tokenization are expected to be among the main trends driving decentralized finance growth in 2024.

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