Apollo Utilizes Securitize's Tokenisation System to Debut a Tokenized Private Credit Investment Fund
In a groundbreaking move, Apollo Global Management, a leading U.S. asset management firm, has partnered with technology company Securitize Inc. to launch ACRED, the first on-chain tokenized fund for accredited investors. This digital extension of Apollo's long-running Diversified Credit Fund, which lends to mid-sized American companies, is set to revolutionise private-credit business via blockchain technology.
From its launch on January 2025, ACRED will be available for trading on Ethereum, Aptos, Avalanche, and Polygon. The tokens, instead of traditional paper statements, will be recorded on blockchain networks and stored in personal crypto wallets.
ACRED functions as a tokenized feeder fund, mirroring the underlying traditional fund's portfolio. Upon purchasing ACRED tokens, investors can mint a secondary token called sACRED, which can be used as collateral on decentralized finance (DeFi) platforms to borrow stablecoins pegged to the U.S. dollar. This, in turn, allows for increased exposure to Apollo’s loan book.
While the specific blockchains used by ACRED are not detailed in the current information, the tokens are integrated with DeFi protocols like Morpho, enabling leverage management within on-chain markets.
Industry experts predict that such tokenized funds will become more common, and DeFi's infrastructure offers efficiency and flexibility likely to become the standard for fund management in the future. By tokenizing real-world assets and enabling their interaction with DeFi protocols, ACRED allows access to private credit markets in a liquid, transparent, and programmable manner.
This is Apollo's first foray into real-world asset tokenization. With over $700 million in assets under management, Apollo's Diversified Credit Fund serves as a diversifier to more volatile crypto native yield products. In a diversified portfolio on-chain, ACRED can help complete the picture of the different assets needed.
Franklin Templeton and BlackRock, major investors in Securitize, are among the firms that have already ventured into real-world asset tokenization. As Apollo's first integration for Securitize, ACRED is also the first to be available on the Solana blockchain and Kraken's layer-2 network, Ink.
Christine Moy, a partner at Apollo, stated that the Apollo Diversified Credit Fund's daily subscription and daily net asset value (NAV) structure is well-suited for blockchain-based markets. The fund is focused on diversified credit, making it a higher yielding complement to stablecoins, tokenized treasuries, and money market funds in a diversified portfolio on-chain.
In summary, ACRED represents a significant step in bridging traditional private credit with the growing DeFi infrastructure. By offering accredited investors a way to participate in Apollo’s private-credit business via blockchain technology, ACRED exemplifies the potential of this new frontier in asset management.
Daily trading of ACRED tokens, the first on-chain tokenized fund for accredited investors, will commence on various blockchains including Ethereum, Aptos, Avalanche, and Polygon in January 2025. This innovative fund, developed by Apollo Global Management and Securitize Inc., allows investors to gain exposure to Apollo’s loan book and participate in the private credit market, all within a decentralized finance (DeFi) setting.
