EN | Tokenizing Private Markets: Lessons from Hamilton Lane & Securitize | MERGE Madrid 2025

Okay. Hello everyone. So, we're going to have a a brief chat here, Victor and me. It's it's a bit awkward because we know each other already. So, many of the things that we're going to be speaking, we're very well aware.

But uh but anyway, it's a it's a good opportunity to share the experiences that we have had in Hamilton Lane and in security and together in the world of the fun organization. So, I'm going to start introducing myself a bit and then I'll let Victor do the same thing. But I'm Jorge Cerna. I'm the C3PO. That's the official title in securityize because I'm responsible for product technology and customer experience on our on our platform.

And uh I'm a geek. So I'd like to have a title that actually had a bit of geekness into it. And I have been working in in securityize which is the world's leading to platform uh for almost eight years. Actually the company was founded eight years ago this month and I joined a few months later and since then we have been doing a lot of noise around the space focusing on the tokenization of uh financial assets on on public blockchains and uh Victor. Hi.

Um, thank you everyone. My name is Victor Jung. Uh, I represent um digital asset at at Hamilton Lane. We are uh solely dedicating ourselves into private markets. That's private equity, real estate, infrastructure, and private credit.

We're a NASDAQ listed firm uh based in the US with uh 950 billion worth of um uh AUM and AUA. Uh proud to have partnered with uh securityize. Uh we started our journey uh by having securityize as a partner. We've tokenized approximately uh we do everything globally but with security test we've tokenized three offerings and uh by far uh they've been uh the largest cont uh contributor in our distribution channels and uh that resulted uh Hamilton Lane uh also investing uh from our balance sheet uh to security and thanks to them you know we are uh now very happy with the results and congratulations with uh the announcement yesterday with uh ARC uh investing thing this week. Yeah.

So, uh you know, good for us.

That's great. So, I was discussing with with Victor before because we met uh a few years ago here in Madrid and uh it was an event that we have created in the in the security company. So, we brought a lot of people from around the world. It was mostly for the the engineering team in in security, but we brought people that we had from our offices in uh in Argentina, people that we come from the United States team uh also from uh some people that we have in Israel and we were there all together and we had the opportunity to listen to to Victor that talked to us what was the vision that he had and what was the vision in Hamilton Lane on why the the the tokenization was considered such a relevant space and what was the opportunity around that and it was it was pretty amazing because it was very energizing and uh and I'm not expecting for you to give the the same speech on law I'm pretty sure that you would be able to do so but but I would like to to hear from you why Hamilton Lane thinks that uh the the tokenization of digital of of uh financial instruments and in particular of private funds it's something that it's relevant and what are the opportunities that you see in the space and and what drove you to basically jumpst start this space because this was one of the big first asset managers that got into the space and and and did so with security.

Yeah, it's um sometimes I ask myself if I did the right thing by um uh leaving whatever I was enjoying before um and uh got blockchain infected and I thought blockchain could solve everything. I could uh be rich with blockchain. I could live in heaven with blockchain until I realized um RWA is more about securities, the most regulated. So you got the worst of crypto and the worst of securities and uh it becomes uh like a trap in where uh you're doing great things that no one ever cares or no one ever knows. But uh having said that, what was the vision?

um private markets and in the context of Spain, everybody talks about 8 million Spanish citizens that um are invested into USITS or mutual funds. Um no one really knows about private markets. It's the biggest thing that doesn't exist for retail. Now if you take into consideration that um 60% of the world's assets, financial assets are contributed by high net worth individual, ultra high net worth individual, mass affluent and m and pops. These four category they equate to 60% of the world's aumumumumumumumumumumumumumumumumumumumum and private markets and private equity as an asset class they have not been uh accessible for the retail audience and you know starting with I did the first digitization of private equity back in 2019 did it again 2020 and 2021 accidentally I just happened to use blockchain as an extension and uh I got infected by it but we realized what a great opportunity unity this was because all of these retail be that the the less rich and the and the more rich they didn't have access to um this asset class.

So how does blockchain help you? You can make it cheaper, you can make it better and you can make it faster. And now we're living in an era after COVID where you know you saw Robin Hood and all of the retail participants coming in and making money. Uh however you know when you look at the stock markets there were more than 9,000 companies listed in the 90s. Now there's uh twothirds of that are gone and retail can are left with very little choice.

One-third of the existing uh stock market meme coins. So there's I think now more than 20 million cryptocurrencies and then you're left with a meme stocks. So if you are a retailer, you don't have much of a uh chance. Everybody should have the dignity to invest into private assets and uh retire and you know be able to have liquidity to um you know to buy their kids or the grandkids a graduation present right so this is uh uh was there was a social cost a commercial cost that uh led our CEO and myself to say hey look let's dedicate the next you know five to 10 years it looks like it could be less or more um to you know making uh you know making money the right way and given you know you know ETF now Bitcoin without 80% volatility I'm not saying that that's a bad thing but retail people now can also um invest into the highest volatile uh asset class in the world and private equity is not so let's do this for a good cause and let's let's you know let's uh achieve financial freedom for everybody that was the cause now if you ask me whether that has been successful or not that's a second question but uh it's so far it's been very rewarding and um you know very fulfilling and and from security we're really really grateful that that Hamilton Lane decided to to jump into this space with us. Uh we're proud to have been able to to launch this kind of products with uh with Hamilton Lane and and we're also proud to have Hamilton Lane as an investor in Securities which has helped us a lot because giving that kind of uh support has also opened to us uh uh a lot of other doors that have not put us in the in the place of being the the biggest uh platform in the world regarding uh RW8 to and trying to make real this this vision that you're putting that by Having the usage of blockchain technology uh we can create additional efficiencies that are the kind of things that were limiting the ability of this kind of p private products reaching bigger markets and trying to go there.

It's true and and that's the second part of your question that as of today most of our focus or or and most of our success at least in in securities has been driven in in the institutional world. So there's not that much democratization there. And uh uh but still I think we're building the foundations that are going to get us there eventually. So what do you think may be the the next steps that that follow after after this and and where's the next value coming from in in the tokenization space?

And I think we've talked about it before. We are watching very carefully how the distribution. So no one has really cracked the code on the retail distribution. I mean in Spain you have um very famous apps like uh you know revolute my investor um in the states you have Robin Hood if you look if you see what's happening in this industry you see I I I I say it napsters which are the non-blockchain tech like Robin uh uh revolute uh are competing with the uh Spotify which is Binance Coinbase and the likes and um you got to see one is nonblockchain the other one is blockchain but the non-blockchains are coming to the blockchain space Robin Hood announced that they would go uh Um uh I think uh I think it was on arbitr uh is it was it on so so they are all turning native they have the custody the licenses and revolute for example they got 30 banking licenses uh they have the clients they sell everything RWA plus crypto now they're optimizing everything uh they got what 30 to 50 million users I think that um state of competition will um keep on evolving like also platform like hyperlquid right they you know, I think with 30, 40 million users. Um, you see platforms like it could be a Binance or a Telegram that has a captive audience of a billion users.

Um, if you see how easy it is to open up a wallet uh with no signature, no physical visits, and if you look at if you take into consideration the the most recent survey in the wealth management space in where um we're living in the midst of the greatest generational wealth transfer in the world. Um there's a survey that stated 81% of the recipients of the assets the next generation have um declared that they will fire their financial advisor because you know they don't like people you know they they they like their apps. Um they need their banks to have uh um digital assasses custody. They need uh they don't like anyone the wine parties and and and you know the the art fairs. Uh they want time on their own.

And if you don't have it, then you're disqualified to manage money because the first thing that they opened up uh as as a uh they turned 17 18 was to have a a uh an app wallet. So we are paying a lot of attention to these platforms, the tech, the neo banks with great apps, uh because this new generation, they will need everything in one place, right? they would need their digital assets, uh their crypto kitties, their their rwas, uh everything they want in one single solution because I think convenience would be um the most important thing and time factor will be the best thing. So you know they they love Tinder, Grinder, uh Netflix, Tik Tok, everything will be on the phone and uh I think this is where the the the big unlock will take place.

That's also impacting I would say the the regulatory landscape in the sense that it's very different in in many places. I remember that last year I was here at at this same conference and I was being asked comparing the the regulatory space in the US and the and in Europe and uh last year I was saying that the that it was very different that that there was very little clarity on the on the space in the US. There was no clarity around the cryptocurrency. There was no clarity around the data sets but there was a I would say regulation by enforcement approach by meaning that you could not try to do things because you were exposing yourself uh to to basically getting sued and and being blocked from being things and doing from doing things and uh on the contrary in Europe there had been a lot of advance both with Mika in the side of crypto assets and also for tokenized securities that is what we work on there was a certain level of of clarity with local regulations like the Les law in Spain that allows the representation of financial instruments on chain and the and the DT pilot regime in Europe that would open the trading uh on chain and now we're one year after and uh the situation in Europe is the same in the sense that the regulatory landscape it's defined but uh bureaucracy has sort of got in in the midst of it and there been very very little number of of approvals on the DT pilot regime. H we have applied and as securityize and we have not been approved yet.

Yesterday there was a a session in which the uh there was a representative from the Spanish regulator said that we're very close. So fingers crossed but but the fact is that uh the the the movements have been very slow and and Mika has gotten into effect to some extent and there have been some approval of money tokens but there are still going things going on but there are very few approvals for instance in in Spain while on the other side there has been a significant change on the on the model of the regulation in the United States. Now there are a lot of push on on the new administration of trying to become the crypto capital of the world. They are moving forward with the genius act that it's considered to some extent copying the e- money token legislation in in Mika but bringing up to create I would say world dominance of tokenized dollars and and much more leniency towards certain things that are are happening on the blockchain space. And now it feels like the advantage on the regulatory space that that Europe had taken it's going to be taken over by the US with the additional uh biggest market and at securityize we're betting in in in Europe.

We have gotten a a license to operate as a SOA deores that allows us to do distribution of tokenized assets. we can tokenize natively in Spain via our our area approval and and we're expecting to get the secondary market approval soon. But it's true that where we're seeing more impact on all of this, it's in the US. So, so when you see companies that are piling licenses in order to be able to operate in in certain models, it's it's definitely something that it's impacting and that's aligns to what what you were saying before that we're mixing the worst part of of crypto and the worst part of the traditional world because we are regulated and we need to do the things according to regulation, but we're also taking advantage of the of the of the crypto world otherwise there would not be uh a reason to do this kind of of thing. And and that's where I think also we need to look into what's coming next.

The advantage of having assets tokenized represented on chain also expose it to the world of DeFi to the world of um smart contracts being able to create additional efficiencies that it's not just about having traditional assets that work better but actually that allow you to do things that you cannot do traditionally with assets. and and we have been working with you in the in the context of modernizing that we have called the the Hamilton L scope fund and uh and I think it has been a a really good experience. So I don't know if you can talk about this.

Yeah. No, it's um it's incredible. Um again, you see me with a tie. Um I'm not uh we're not DeFi people, but we're in a position where we have to know what we know, but we also have to admit what we don't know. And uh this is why we are outsourcing uh everything that we could to uh our partner uh securityize and um you know while we work we've been very much surprised and shocked to an extent if you think about things that are very normal and common in our lives.

Let's start with um I think it's 15 uh years 16 years ago there was a once upon a time I say it uh there was this uh company that um you know wanted to um disintermediate hotels right they were represented as the biggest breach of Tennessee hotel laws real estate laws in the world and fast forward to today they became the largest um hotel operator with no inventory called uh Airbnb they own 30% market share they're bigger than the three Hayatt Tilton and IHG G uh uh brands and the same happened with Uber once upon a time. They were constituted as the biggest breach of of transportation laws and taxi laws. Uh everybody thought that they will fail. Fast forward to today, they're bigger, 15 times bigger than all of the single stocks, taxi uh stocks listed in the world combined. Uh and no one talks anything bad about Uber.

They're more they're normal uh uh than than as as common as oxygen is. And you could say, "Oh, Victor, you're just talking about, you know, non-relevant uh industries." I mean, once upon a time, our parents uh used to teach us how to trade the first stock. Uh today, fast forward to today, you have uh my nephew teaching how to buy the first NFT with uh one ETH, and it's a stupid pixelated uh uh uh J uh JPEG. And uh it's a normal thing today.

We're learning uh everything that was normal is not normal anymore. Everything is changing. And this is what we discover by um you know applying DeFi techniques in in in RWA where you can have a bank uh without being a bank. You can lend uh without having a a banking license. I mean we're exploring again with uh uh with the likes of a in where we can do something called leverage looping.

Um there's an added liquidity, there's a a more frequent NAV, uh there's fractionalization. These things were not possible before uh without uh the intervention of the blockchain technology. I mean you still have to register your fund get uh 100% 200% regulatory clarity and the buying from the regulators while you're uh implementing these techniques and uh once you do I mean miracles uh really happen. I we call it the unlocking um you know composibility and unlocking value on on something that didn't exist before. So uh we are not even at the first inning.

We think that this would um scale very big. It will start with money markets fund you know with liquidity first but um it will come to the private market space and this would be very accessible to anyone um in the world and you know you could in theory uh you already allow your clients to buy with USDC. So these are crypto purchasable uh solution. So that in itself is is also something very very new

and and not only being able to buy with uh with USDC but because we have gone through that path of of modernization that we we're making taking a a private asset such as a the scope private fund

but adapting it so that it's more a cryptonative asset. It allows us to do instant subscription with USDC meaning that we have an atomic transaction in which we do uh delivery versus payment that happens integrally on chain and investors pay with an stable coin and receive instantly in the same transaction the unit of the of the fund which it's very normal in any kind of minting behavior on an smart contract for crypto but when what you're receiving it's actually representing an LP interest into a fund with a total legal plugging and total legal responsibility is critical. The other piece and it's also very important in crypto in order to be able to participate in this kind of of uh DeFi infrastructures. It's the opposite side being also able to to liquid it to be able to turn the the same asset into a liquid asset into an stable coin as well. And that's also something that we have worked with together with you in order to facilitate the ability to do it and we have launched it now for scope that allows us to turn 247 instantly scope units into the USD thanks to a collaboration with Elixir that it's using their stable coin DUSD in order to facilitate these kind of cycles and with that opening up things as you were mentioning using it as collateral in protocols being able to take a loan on a stables against this process And if you use that loan to buy more scope and as such put it again as collateral, you can increase without increasing your risk exposure increase your your position and and do things that in in traditional finance are are very complicated if not impossible.

So

I would say closer to impossible.

Closer to impossible.

So that's that's the that's the thing. We're trying to make the impossible possible.

So at the end the story has a positive note. Do you agree? Or is it

Yeah. Yes. Is is it a failed story that it won't scale or you think um the the the end of the story is very much

I think it's a successful story in opening the path. It's definitely has been very successful for security and I think it's uh only a few steps of the joint successes that we're going to have in the in the very short term future.

Absolutely agree.

Thank you Victor.

Thank you.

Thank you everyone.

Thank you. Thank you.