Investcorp is riding the wave of a growing trend: tokenizing a portion of its private-market offerings on the blockchain.
The investment firm just announced it has partnered with digital-assets specialist Securitize to make its latest GP-stakes fund available for individual investors on a public blockchain.
The offering will be part of Investcorp’s fundraising efforts for the second iteration of its GP-stakes fund, the Investcorp Strategic Capital Partners II (ISCP II), which began seeking commitments last year, according to SEC filings.
Through the offering, a qualified purchaser—in this case, an individual with $5 million in investable assets—can purchase a slice of the tokenized fund.
“There is a strong secular trend around the democratization of access of retail investors to alternative assets,” said Timotheus Osnabrug, an investment partner at Investcorp’s GP stakes business.
Investcorp is the latest to join a bandwagon. Asset managers such as KKR and Hamilton Lane have preceded Investcorp, using blockchain technology to expand wealthy individuals’ access to alternative assets.
In 2022, KKR launched a tokenized fund on the Avalanche public blockchain with its Health Care Strategic Growth Fund II. Hamilton Lane last year rolled out similar products through Securitize, including a tokenized private credit fund.
Investcorp’s tokenized fund requires a minimum ticket size of $20,000, much lower than what would typically be required of institutional investors entering a fund.
It also features a one-year lockup period, after which token holders can trade their investments on a platform run by Securitize. This gives individual investors greater control over their liquidity in an asset with long holding periods.
GP-stakes in middle market
Investcorp’s GP-stakes business currently manages $1.5 billion in assets and has made 12 investments since it was formed in 2019.
The platform focuses on acquiring minority stakes in mid-market fund managers, defined by Investcorp as those with $1 billion to $10 billion in assets under management. It targets experienced, top-performing managers and a range of private-market strategies, including buyouts, private credit, real assets, infrastructure and secondaries.
Investcorp has already made three investments with the capital it has raised for ISCP II: Monomoy Capital Partners, a mid-market PE manager; Banner Ridge Partners, a secondary firm; and MML Capital Partners, a UK-based structured capital specialist.
The debut fund, a 2021 vintage with $620 million in LP commitments, has fully invested its capital and realized two partial exits, according to Osnabrug. Investcorp also manages $200 million in co-investment capital allocated to this strategy.
