Sumitomo Life invests in tokenized Blackstone real estate fund – Ledger Insights

7 views 9:00 am 0 Comments December 30, 2023

Yesterday bank-backed startup Digital Securities announced its second tokenized real estate issuance in Japan. Sumitomo Life was the primary institutional investor and a Blackstone real estate fund underpins the tokenization. Digital Securities’ backers are Marubeni and regional Joyo Bank. The bank lent money to the tokenization structure.

There are already several real estate tokenizations in Japan, but many target retail investors and relate to a specific building. In contrast, the Digital Securities tokens currently target only institutional investors. Nagoya Bank was the investor in the first security token.

Both of Digital Securities’ security tokens were underpinned by a Blackstone Group real estate fund where the fund investment is put into a trust. We believe Blackstone only targets qualified institutional investors in Japan.

The offering turns “anonymous partnership interests” into security tokens.

Usually, the transfer of an interest in a silent partnership requires a written notice with a certified date. As part of a Japanese regulatory sandbox, Digital Securities received a certification that it can complete all the necessary steps digitally. That includes issuance, custody, sale and secondary distribution.

Most of these steps are executed on the Ownership tokenization platform. Digital Securities has a 50% stake in Ownership and classifies it as a subsidiary.

Digital Securities says it “is developing blockchain technology with the aim of providing next-generation financial products that will help anyone become a wealthy person. We are currently preparing a real estate STO (security token offering) business that will enable the trading of actual real estate or trust beneficiary rights backed by real estate as security tokens.”

Japanese real estate tokenization

Meanwhile, Mitsui & Co Digital Asset Management (MDM) is targeting retail investors with its Alterna real estate funds. It uses tokenization to remove the need for brokers and enable the asset manager to have direct client relationships. Clients use the Alterna online platform to invest. It has a few alliances with other platforms, such as Sony Bank, which act as introducers but redirect investors to the Alterna website.

As of January, articles like this which we uncover and are (initially) not published elsewhere will be behind a paywall alongside reports. Sign up if you’d like to be notified of the launch of Ledger Insights Research.

Tags: ,