Digital asset management solutions provider Vertalo is playing a key role in the first big deal that brings tokenization’s benefits to wider pool of investors. Such moves are critical if tokenization is to realize widespread adoption.
Vertalo is working with Inveniam Capital Partners and Securrency, a global fintech infrastructure and products company, to provide capital for middle market real estate and infrastructure projects from distribution channels for the first time. The hybrid distribution model allows fiat and cryptocurrency investors to fund institutional-quality tokenized assets.
Four projects are included in this $260 million initiative, a commercial office building in Downtown Miami; a North Dakota water pipeline project; a student-housing portfolio; and a Florida multi-family housing project.
Vertalo contributes its crypto cap table platform and AML/KYC capabilities to support SEC compliance including investor registration, eligibility and ongoing communications. Securrency will provide investor communications, payment functionality, smart contract design and trade functionality, while Grapefruit Trading is providing trading support for the offerings in converting the crypto to fiat.
Other large “tokenized” projects have been announced, but most are more sizzle than steak, Vertalo founder and CEO Dave Hendricks said. Some are only available to company insiders while others are mere tokenizations of existing products.
“This is groundbreaking,” Mr. Hendricks said. “It’s the biggest (tokenized) deal ever.”
By onboarding and managing investors on a blockchain-native cap table, Vertalo overcomes the issues which separate typical cap tables from liquidity sources, Mr. Hendricks said.
“With the contract on the blockchain we enable secondary liquidity for private equity and venture fund assets. Inveniam onboards investors into all four projects and the blockchain-enabled contract connects investors to exchanges and ATSs.
“One of the reasons private equity has eluded liquidity is the assets are locked away. Buying or selling an interest in a real estate partnership had been an administratively nightmarish process.”
Given the novelty of the process, several companies had to collaborate to make the deal happen, Mr. Hendricks said. Expect more such deals to happen between different companies in the space, with Vertalo involved in many of them.
“What the market needs to understand is this is a team so there are different vendors playing different roles,” Mr. Hendricks said. “We’re excited to have the opportunity to work on these very first ones.”
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