Asset Tokenization in Financial Markets 2025

Contents26 Alternative assets Private equity Private equity (PE) is ownership stakes in companies not listed on public exchanges, typically held by institutional investors and requiring longer investment horizons in exchange for potentially higher returns. The size of the global PE market reached approximately $5.3 trillion in 2023 and shows signs of continued growth.36 Some projections are for the total PE/venture capital market to grow to $7 trillion by 2030, with roughly 10% being tokenized by that same time.37 PE markets are considered less efficient than public markets due to limited information flow and transparency. Investment in private markets relies heavily on intermediaries (fund managers) to source and evaluate deals, resulting in performance disparities.38 Tokenization has emerged as a potential solution to these inefficiencies by digitizing ownership in funds or companies. Industry research shows that 73% of European fund managers anticipate that PE will be the first asset class to experience significant tokenization, driven by a need to improve liquidity, transparency and accessibility.39The following benefits could be achieved: 1. Enhances information symmetry Tokenization can drive increased data sharing and adding disclosures to PE can drive more transparency in the currently opaque private markets.40 2. Facilitates operational efficiency Tokenization, if applied, should reduce frictions associated with operational and technological aspects instead of altering the deal-structuring and relationship-based nature of these markets. 3. Expands accessibility For example, in 2021, ADDX tokenized units from Partners Group’s €5.5 billion ($6.2 billion) PE fund, allowing fractional investments as low as $10,000 (previously $100,000-plus), greatly expanding investor accessibility via lower minimum investment thresholds and complying with regulatory standards.41 Several firms have already taken steps to tokenize PE investments. Recently, Aurum Equity Partners launched the world’s first combined PE and debt tokenized fund valued at $1 billion on the XRP Ledger, an open- source and decentralized Layer-1, to drive worldwide data centre investment, enabling enhanced investor access and liquidity through secondary markets.42However, private markets derive much of their value from the individual nature of deals, which require research and structuring to deliver investor value. Tokenization may not always be necessary to achieve benefits. For example, EquityZen and Forge Global are two marketplaces offering retail investors a minimum investment threshold of $5,000 and they do not use DLT.43 Tokenized assets