Solving Traditional Fund Administration Challenges
Fund administration, a crucial backbone of investment management, has long been challenged by inefficiencies in investor onboarding, slow NAV calculations, and the lack of a unified approach to handling securities. Legacy systems often require fund managers to use separate tools for capital raising, trading, record-keeping, and compliance. This fragmented approach can lead to operational delays, increased manual work, and heightened risk, particularly in the fast-evolving world of digital and crypto assets.
Problem:
Crypto hedge funds and similar digital asset-focused funds need agility, speed, and accuracy to manage investor demands and market volatility. Traditional fund administration processes are not well-suited to handle these needs, particularly in areas that require real-time data, automated workflows, and on-chain integration.
The Solution:
The acquisition of Theorem by Securitize presents a strategic solution to these longstanding challenges. Securitize, known for its role in tokenizing real-world assets, has launched Securitize Fund Services—a comprehensive suite designed to streamline and modernize fund administration. By combining Theorem’s expertise in crypto fund administration with Securitize’s capabilities, this new approach promises to address gaps left by traditional systems and bring fund administration into the on-chain era.
Key Improvements:
- Digitized and Efficient Investor Onboarding
One of the biggest challenges in fund administration is onboarding investors, which is often a slow, manual process that requires repeated data entry and compliance checks. Securitize Fund Services automates investor onboarding with digital identity verification and smart contracts, significantly reducing administrative burden and speeding up the process. - Real-Time NAV Calculation Integrated with On-Chain Data
Traditional NAV calculations are typically performed daily or even weekly, leaving managers with outdated data in fast-moving markets. Securitize’s platform integrates directly with blockchain oracles, allowing fund managers to calculate NAV in real time. This capability provides an immediate, accurate view of asset values, which is crucial for crypto funds where price fluctuations are frequent. - On-Demand Issuance and Redemption of Tokenized Securities
Unlike traditional funds, which may limit the timing and frequency of security issuance, tokenized funds managed by Securitize allow for on-demand issuance and redemption. This innovation offers liquidity and flexibility, which can be a key differentiator for crypto hedge funds that need to respond to market opportunities or investor requests with speed.
Expanding Opportunities for Both Web3 and Traditional Finance (TradFi)
The partnership between Securitize and Theorem not only enhances efficiency for crypto-native funds but also bridges the gap between Web3 and traditional finance. As Securitize integrates on-chain processes with traditional fund administration, it offers institutions a regulated, compliant pathway to explore tokenized assets without stepping outside familiar regulatory frameworks.
According to Carlos Domingo, Securitize’s Co-founder and CEO, the expanded offering represents a one-stop solution for institutional clients: “We are proud to provide our customers with an all-inclusive, one-stop platform for their investment needs, combining Securitize’s expertise in tokenization, regulated primary and secondary sales of tokenized assets, and transfer agent services with our new fund administration capabilities.”
A Unified Offering for Institutional Investors
With this partnership, Securitize Fund Services now offers institutional investors a seamless and integrated ecosystem for managing crypto and tokenized assets. The platform includes:
- Primary Marketplace for Capital Raising: Compliant digital securities offerings that allow companies and funds to raise capital efficiently.
- Secondary Trading through Regulated ATS: Access to liquidity via a regulated Alternative Trading System (ATS), enabling secure and compliant trading of tokenized assets.
- Tokenization Services: Converting traditional assets into digital securities, providing greater transparency and accessibility.
- Transfer Agent Services: Complete record-keeping and compliance solutions.
- Comprehensive Fund Administration: Enhanced fund management processes, including real-time reporting, automated workflows, and tokenized fund capabilities.
Real-World Impact on Fund Managers and Investors
This unified approach simplifies fund administration processes and allows fund managers to navigate regulatory requirements, investor relations, and asset reporting seamlessly. For investors, it offers more flexible access to crypto funds and the ability to invest, redeem, or trade assets in real time, supported by Securitize’s regulated ecosystem.
Theorem’s integration into Securitize Fund Services exemplifies a forward-looking approach to fund administration—one that not only addresses traditional bottlenecks but also equips fund managers to operate within the rapidly evolving digital asset space. For institutional clients, this partnership offers a glimpse into the future of fund management, where blockchain and real-time data integration redefine how assets are managed, traded, and reported.
