Tokenize and Trade Private Equity Fund Shares
Use Cases
About
| Use Case Category | Use Case Scope |
|---|---|
Private Markets/Asset Tokenization and Trading | This use case involves a private equity firm tokenizing its fund shares as digital securities on a blockchain-based platform. It enables liquidity for investors by allowing compliant secondary trading of the tokenized shares between approved investors on interconnected venues. |
Description
Key Stakeholder:
Private Equity Firm
Story:
The private equity firm signs up on the platform and submits required documents for KYC.
The firm works with the platform to map out the structure of their fund including details like total shares, valuation, dividend policy etc.
The platform tokenizes the fund shares by creating digital securities representing ownership in the shares.
The tokens are allocated to the limited partners who have invested in the fund based on their ownership percentages.
The private equity firm configures trading rules on the platform to only allow accredited investors to hold the token.
Approved investors can trade the tokens on secondary markets connected to the platform. All transactions are recorded on-chain.
Ownership records are maintained real-time. Cash settlement occurs atomically based on the transaction.
The private equity firm can distribute dividends or other cash flows to token holders through the platform.
Postconditions:
The private equity fund shares are tokenized as digital securities. Approved investors can trade the tokens providing liquidity. The private equity firm has transparent recordkeeping and can manage distributions.
Example Solution Provider:
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