Securitize Logo

Secondary Funds: An Alternative Investment for Qualified Purchasers and Family Offices

Discover the benefits of secondary funds, a new and innovative way of investing in real world assets with potentially lower fees.

Jul 5, 2023

In recent years, alternative investments, also known as “alts”, have become increasingly popular among investors seeking higher returns and portfolio diversification. In fact, they’re expected to grow between 18-24% by 2025. As a qualified purchaser or family office, you are likely familiar with the benefits of alts, but may not be aware of secondary funds—a type of investment that leverages the power of tokenization to provide access to private equity and private credit investments, while potentially minimizing fees. In this post, we will explore the features and benefits of secondary funds and how they can help you achieve your investment goals. Investment risks do apply.

What are secondary funds?

Secondary funds are investment vehicles that allow investors to access real world assets, such as private equity and private credit, through tokenization. Tokenization is a process that converts assets into digital tokens, which can be easily traded on blockchain-based platforms. This provides investors with the opportunity to make smaller investments, with the potential for greater liquidity, while still benefiting from the potential returns of private investments.

Benefits of secondary funds:

  • Diversification: Secondary funds offer access to a range of alternative investments, which can help you diversify your portfolio and potentially reduce overall risk.
  • Lower Fees: By using tokenization, secondary funds can significantly reduce the fees associated with traditional private equity and credit investments.
  • Potential Liquidity: Unlike traditional private investments, secondary funds provide investors with the potential for liquidity and flexibility, enabling them to buy and sell tokens more easily.
  • Experienced Management: Secondary funds are managed by experienced teams, such as Hamilton Lane, which has over 22 years of experience, $14 billion in assets under management, and has completed over 310 transactions. Hamilton Lane has a team of 35 members with over 26 years of experience.

Real-World Impact:

To illustrate the potential impact of secondary funds, consider the potential case of a family office that invests in a secondary fund managed by Hamilton Lane. By investing in a diversified portfolio of private equity and credit investments through tokenization, the family office can potentially generate higher returns than traditional investments, while also potentially reducing fees and overall portfolio risk. This may help the family office achieve its long-term investment goals, such as funding education for future generations or supporting charitable causes. Note that investment goals may vary, and this information is provided for illustrative purposes only and should not be construed as a recommendation to purchase securities or indicative of future results.

Unlock Secondary Fund Potential:

If you are interested in exploring secondary funds, we encourage you to consider investing through a platform like securitize.io, which offers a range of investment opportunities in tokenized private assets. Keep in mind that past performance is no guarantee of future performance, and you should carefully consider your investment goals and risk tolerance before investing.

Secondary funds offer an innovative way for qualified purchasers and family offices to invest in private equity and credit investments, while potentially minimizing fees and risks. With experienced management teams like Hamilton Lane and the power of tokenization, secondary funds provide investors with access to a range of real world assets that can help achieve their long-term investment goals.

Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and member FINRA/SPIC. Private market investments can be speculative or considered risky, including the potential loss of your investment, and may not be appropriate for every investor.

© 2022 Securitize, LLC
All rights reserved
info@securitizemarkets.io
Check the background of Securitize Markets on Finra BrokerCheck.

Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and member FINRA/SIPC. Neither Securitize Markets, nor any of its affiliates provide any investment advice or make any investment recommendations to any persons, ever, and no communication through herein or in any other medium should be construed as such. Securities offered on the Securitize Markets ATS have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Assets listed herein, such as digital assets or tokens using blockchain, are speculative, involve a high degree of risk, are generally illiquid, may have no value, have limited regulatory certainty, are subject to potential market manipulation risks and may expose investors to loss of principal. Investments in private placements, start-up investments in particular, are also speculative and involve a high degree of risk. Investors must be able to afford the loss of their entire investment. Eligibility to buy and sell securities on the Securitize Markets ATS is determined by Securitize Markets in its sole discretion. Offers to sell, or the solicitations of offers to buy any security can only be made through official offering documents that contain important information about risks, fees and expenses associated with the applicable securities available for trading on the Securitize Markets ATS. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and are encouraged to consult with a financial advisor, attorney, accountant, tax advisors, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Past performance is not indicative of future results. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided herein or through any references/links herein. Any financial projections or returns shown herein are provided by the issuer of the relevant security and Securitize Markets has not verified the accuracy. Further, there can be no assurance that any valuations provided by issuers are accurate or in agreement with market or industry valuations. Securitize Markets and its affiliates make no representations or warranties as to the accuracy of such information. Securitize Markets may collect certain information about you that helps us comply with various securities regulations and rules and the USA PATRIOT Act, a Federal law that requires all securities firms to obtain, verify, and record information that identifies each applicant. The information also helps us more fully understand your investment profile and identify what types of investments or strategies may be suitable for you. The term “Investors” used on this website, typically refers to accredited investors where applicable. Please note: if we cannot verify the information you provide, we may be required to restrict or deny your account. Trading during Extended Hours Trading Sessions carries unique risks, such as greater price volatility, lower liquidity, wider bid/ask spreads, and less market visibility, and may not be appropriate for all investors. There is no guarantee that a diversified portfolio will enhance overall returns, outperform a non-diversified portfolio, or prevent against loss. By accessing this site and any pages thereof, you agree to be bound by our Terms of Service and Privacy Policy.