Mubadala Capital, the asset management arm of Abu Dhabi's sovereign wealth fund, Mubadala, is exploring the tokenization of its private market investment strategies through a collaboration with KAIO, a blockchain infrastructure provider. This initiative aims to broaden access to alternative investments for qualified institutional and accredited investors, leveraging KAIO's regulated digital infrastructure to create secure and compliant routes to these opportunities.
The collaboration will assess the feasibility of using KAIO's on-chain systems, initially designed for regulated real-world assets, to represent shares of private equity or credit funds as digital tokens. This tokenization process could potentially streamline subscription, redemption, and transfer processes, leading to reduced overhead and improved efficiency.
Max Franzetti and Fatima Al Noaimi, Co-Heads of Mubadala Capital Solutions, stated that this partnership reflects the firm's commitment to expanding access to institutional investment strategies through secure and innovative financial infrastructure. By utilizing KAIO's compliant tokenization framework, they aim to create new global access channels while upholding high standards of governance, regulatory alignment, and investment oversight.
Shrey Rastogi, CEO of KAIO, noted that this collaboration demonstrates the scaling of traditional institutional capital on-chain. He added that Mubadala Capital is embracing the future of tokenizing real-world assets, making them globally accessible without compromising compliance, governance, or investor protections.
KAIO, formerly known as Libre Capital, describes itself as the first protocol purpose-built for regulated real-world assets. Its structure integrates compliance, legal auditability, and blockchain-native execution, ensuring that tokens represent legally valid fund holdings tied to real underlying assets, while also offering the benefits of on-chain settlement and transparency. KAIO has already tokenized over $200 million in assets from funds of global institutions, including BlackRock, Brevan Howard, Hamilton Lane, and Laser Digital.
Mubadala Capital's exploration of tokenization aligns with a broader trend in the asset management industry to embrace tokenization as a means of enhancing liquidity and reducing entry barriers in private markets. Traditional private equity and credit investments often involve extensive documentation, long lock-up periods, and limited secondary liquidity. Tokenization offers a potential solution by allowing investors to access or exit positions more fluidly, albeit within compliance-approved frameworks. It may also enable the firm to tap into a new investor base that prefers digital asset-style liquidity but requires traditional fund-level compliance and oversight.
Industry research from 21.co indicates significant growth in the tokenized asset market, expanding from $8.6 billion in 2023 to over $23 billion by mid-2025. Money markets have been a focal point of tokenized fund activity, with established investment managers like Franklin Templeton and digital-native challengers issuing funds in US Treasury bills valued in the several billions of dollars.
For KAIO, collaborating with a major player like Mubadala Capital represents a significant milestone. The firm has integrated with networks such as Sei and Hedera to expand its institutional fund-tokenization reach. This partnership highlights the increasing interest and adoption of tokenization in the financial industry, with potential benefits for both investors and asset managers.
