Securitize has launched a tokenised fixed-income fund with Neuberger Berman that will invest mainly in high-yield bonds and issue digital interests on Avalanche, Ethereum, Solana and Sui.
The Neuberger Securitize High Income Tokenized Fund, which will trade under the ticker HINC, is designed to seek risk-adjusted returns from a portfolio of income-producing fixed-income assets, Securitize said in an announcement on 18 August.
Its investment mandate also allows exposure to collateralised loan obligations (CLOs) and leveraged loans. Neuberger Berman will act as the fund’s sub-adviser, drawing on a fixed-income operation responsible for more than $230bn in assets.
Securitize Capital LLC will serve as investment adviser, while Securitize Markets LLC will make interests in the fund available to eligible investors. Other Securitize affiliates will provide administrative and operational services.
HINC’s tokenised interests will be issued across four public blockchain networks, giving qualifying investors access through Avalanche, Ethereum, Solana and Sui. However, the fund will not be open to all cryptocurrency wallet holders.
Investors must be accredited investors or qualified purchasers and complete Securitize’s onboarding procedures, including know-your-customer and anti-money laundering checks. Eligibility will also depend on an investor’s location and the securities laws that apply in that jurisdiction.
As a result, the tokens will represent interests in a regulated investment product rather than unrestricted cryptocurrency that can be freely accessed by anyone.
Carlos Domingo, co-founder and chief executive of Securitize, said the arrangement would put Neuberger’s fixed-income expertise on public blockchains through Securitize’s regulated infrastructure.
Neuberger Berman’s responsibility is limited to its role as sub-adviser. Securitize’s various entities will continue to oversee the fund’s advisory, distribution, administrative and tokenisation functions.
The fund marks Neuberger Berman’s first appointment as sub-adviser to a tokenised fund. The investment manager will apply its research and portfolio-management approach to the underlying fixed-income assets, rather than operate the blockchain infrastructure on which ownership is recorded.
Neuberger manages about $613bn across equities, fixed income, private markets, real estate and hedge fund portfolios, according to company data published on 30 June. More than $230bn of that total is managed through its fixed-income platform.
Anil Abraham, Neuberger Berman’s head of product management, said the firm had built its fixed-income business through several market cycles using research-led and diversified investment strategies.
Tokenisation changes how investors hold and transact in fund interests, but HINC’s underlying strategy remains focused on traditional credit instruments. High-yield bonds are generally corporate debt rated below investment grade. Leveraged loans are commonly issued by companies with high levels of debt.
CLOs, another permitted asset class, pool corporate loans and distribute the resulting cash flows among different groups of investors. Securitize and Neuberger did not disclose what proportion of HINC’s portfolio would be allocated to high-yield bonds, CLOs or leveraged loans.
The fund enters a growing market for blockchain-based versions of conventional financial products. In July, Centrifuge and New York Life Investment Management launched a tokenised US high-yield corporate bond strategy.
A report on NYLIM’s HYB fund said subscriptions and redemptions settle in USDC, while NYLIM remains responsible for portfolio management and risk controls. Unlike that single-network product, HINC will be available across four blockchains from launch. Securitize did not say whether subscriptions and redemptions would settle in US dollars, stablecoins or both.
Securitize said its tokenisation platform held more than $4bn in assets as of April. The company works with asset managers including Apollo, BlackRock, BNY, Hamilton Lane, KKR and VanEck.
Earlier in August, BlackRock launched two tokenised funds holding cash, short-term US government debt and Treasury-backed repurchase agreements. Securitize acts as transfer agent and tokenisation provider for those products.
HINC differs from those cash and Treasury-focused funds because it will invest in lower-rated corporate debt and other credit assets. Its returns and risk will therefore be determined by the performance of the underlying portfolio, rather than by the particular blockchain used to record ownership.
Data also indicates increasing use of blockchain networks for traditional financial assets. A May report based on InvestaX data valued the tokenised real-world asset market, excluding stablecoins, at about $29bn at the end of March. The market had grown by approximately 30% during the first quarter.
Securitize has also tokenised its own publicly traded shares. When the company began trading on the New York Stock Exchange in July, it placed its shares on Solana and Avalanche. The tokenised SECZ shares represent the same common stock as the exchange-listed securities, rather than a separate share class.
In the United States, Securitize Markets is a broker-dealer registered with the Securities and Exchange Commission and operates an alternative trading system. Securitize Transfer Agent is also SEC-registered, while Securitize Capital operates as an exempt reporting adviser.
Those businesses will divide the responsibilities associated with HINC. Securitize Capital will advise the fund, Securitize Markets will offer its interests, and affiliated companies will provide tokenisation and administrative services.
Outside the US, Securitize operates through Securitize Europe Brokerage and Markets, an authorised investment firm that runs a trading and settlement system under the European Union’s DLT Pilot Regime.
Neuberger Berman was founded in 1939 and remains privately held and employee-owned. It has no corporate parent or unaffiliated external shareholders, employs about 3,000 people across 26 countries and manages portfolios for institutions, financial advisers and individual clients.
