Apollo Global Management Inc. is going to offer a new fund on a public blockchain as it expands its relationship with financial Technology firm Figure.
Apollo and Hamilton Lane Inc. are launching investment vehicles using a platform on Figure. The groups are utilizing a blockchain Technology known as Provenance, which serves as a ledger to issue and transact across private investments.
The offering will be tied to Apollo’s digital asset strategy, Figure Chief Executive Officer Mike Cagney said. Hamilton Lane is tokenizing a so-called “40 Act” fund that focuses on private markets.
“It’s the beginning of what we think will be a systemic trend of funds migrating onto the blockchain,” Cagney said in a telephone interview. “It’s not crypto. It’s using blockchain as it was intended as a way to disintermediate marketplaces.”
Apollo’s foray into digital assets includes working with Figure for purposes such as the origination and transfer of mortgage loans, and also for securitization. Apollo CEO Marc Rowan has said the Figure relationship would help reduce costs while providing more accessible data through blockchain Technology.
Apollo and Hamilton Lane join a number of firms using blockchain to scale work with investors. KKR & Co., another rival in private assets, said earlier this year it would be tokenizing an interest in a growth fund through the Avalanche public blockchain.
Cagney explained that blockchain is helping the funds reduce costs tied to record-keeping of fund investors, while providing easier ways to issue capital calls and give money back to backers. He also said it enables the use of stablecoins to facilitate fund subscriptions and distributions.
“This is using blockchain to reduce costs, improve efficiencies, and ultimately drive revenue,” Cagney said. “It increases the breadth and reach of the fund.”