Germany's third-largest asset manager, Union Investment, initiates a blockchain-based fund
In a significant move towards modernizing traditional asset management, Union Investment, a subsidiary of DZ Bank with €455 billion in assets under management, is launching a blockchain fund. The fund aims to expand its investment options to include token-based assets in the future, but will not invest directly in crypto tokens, instead doing so indirectly via certificates.
The Union Investment blockchain fund will primarily invest most (65%-100%) of its assets in domestic and international stocks related to blockchain, DLT, and digital assets. Bonds are also an investment option, but they should not make up more than 20% of the assets. The fund will commit a small proportion (up to 15%) of its assets indirectly to crypto tokens via certificates.
Union Investment is known for being one of the most prolific investors in tokenized assets, having previously invested in the first two European Investment Bank euro-denominated digital bonds and some of the Siemens public blockchain bond.
Meanwhile, another asset manager, Hamilton Lane, is planning to issue a new digital fund share class in an existing fund with nearly $4 billion in assets. The new digital fund share class will be a part of an existing fund, but it has not been previously invested in any specific digital bonds or blockchain bonds mentioned in this article. Hamilton Lane has not stated an intention to expand investment options to include token-based assets in the future.
The broader industry movement reflects key themes relevant to these major players. Asset managers are leveraging blockchain technology and tokenization to create more efficient, transparent, liquid, and lower-cost investment products. This technology enables quicker transactions and access to real-world assets previously difficult to trade in traditional markets.
Tokenization drastically reduces settlement times from days to near real-time, particularly benefiting cross-border transactions by overcoming traditional reconciliation delays. The immutable shared ledger of blockchain offers full transparency into ownership, transaction history, and provenance, building trust between investors and regulators alike.
While some asset managers may be cautious about investing in volatile cryptocurrencies, the broader institutional interest in blockchain assets is growing. Regulatory clarity, such as initiatives led by the U.S. SEC ("Project Crypto"), aims to create practical frameworks distinguishing securities, stablecoins, and other digital assets. This encourages institutional participation by reducing uncertainty and enabling secure custody and trading environments.
Firms with significant investments in crypto assets, like Bitwise Asset Management, project strong long-term growth for digital assets such as Bitcoin, targeting up to 1%-5% portfolio allocations by institutional investors. This indicates that asset managers like Hamilton Lane, known for private market investments, may increasingly integrate blockchain-based digital assets within their broader asset allocation strategies.
Jochen Kerler, Head of Alternative Investments in Product Management at Union Investment, stated that the asset structure will become broader in the future. While specific recent initiatives by Union Investment, European Investment Bank, Metzler Asset Management, and Hamilton Lane were not singled out in the most recent data, the broader industry movement illustrates the importance of these themes for such major players.
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