New Partnership Will Provide Capital Allocators an Edge in Linking Private Investment Opportunities via Digital Securities
The new strategic partnership between Liquidity Digital and Securitize announced this week gives capital allocators a decided edge in identifying and linking to the right private investment opportunities via digital securities.
Liquidity Digital is an NYC-based technology provider for private capital market deal distribution and post-issuance solutions via blockchain-based digital securities. Securitize is an industry-leading issuance platform for digital securities. Together, the companies are taking on what they say are the outdated forms of capital formation that are not meeting the increasingly diverse needs of investors.
The pair plans to use their distinct expertise and experience to help institutional-grade issuers create digital securities and connect them with global investors. The digital securitization process will then be recorded on the blockchain and flow through Liquidity Digital’s technology platform at every stage of the life-cycle, pre- and post-issuance.
“Liquidity Digital’s platform empowers brokers of institutional capital and complements Securitize’s capabilities in issuing digital securities. We use blockchain-based solutions to trace and verify the transaction history and integrity of deal-flow data so there is a permissioned sharing of information and a secure environment for introducing brokers and placement agents who may otherwise have been competitive,” said Syed Hussain, CEO, Liquidity Digital.
“Historically high fees, long lockups, limited accessibility and a lack of transparency have been prohibitive. We are offering an innovative digital solution to that by maximizing our companies’ distinctive strengths,” added Jitin Jain, CTO, Liquidity Digital.
According to the companies’ executives, digital securities allow for lower administration costs for issuers, along with global accessibility to investors, as well as added liquidity options and faster settlement processes. Those blockchain-based securities are able to show secure privacy standards and a detailed transaction history of ownership. Through the integration of digital securities with an issuance platform, they can be programmed with flexible criteria, such as checks against OFAC lists, which prohibit restricted individuals from owning the private security.
The partners point to a variety of other advantages that their new relationship will provide to clients, including:
- Expanded expert market insights, deal sourcing and lower fees
- Smart contracts with full transparency for issuers, investors and broker-dealers, as well as regulators
- Greater potential for secondary market liquidity
“While we see digital securities as the future of the industry, Liquidity Digital believes in building bridges to tomorrow that will lead to seamless industry adoption of this innovative and game-changing technology,” added Jain.