Abu Dhabi's Mubadala Capital has launched a tokenized version of its $75 million private equity fund for qualified investors, partnering with Coinbase and KAIO to create a regulated digital asset vehicle. The alternative asset manager announced the launch on Thursday, making this an unprecedented step by a major U.S. publicly listed company in adopting regulated digital tokens for native on-chain treasury management. The fund is available on Coinbase's Base network, Solana and Sui networks and has already attracted approximately $75 million in onchain assets from both conventional and crypto-native institutional allocators.
Coinbase (COIN) is acquiring shares of the tokenized fund directly to hold on its corporate balance sheet, utilizing its proprietary Layer-2 blockchain Base alongside the Solana and Sui networks for digital issuance. This move represents an early example of a publicly traded crypto company investing in a tokenized private markets product, with the companies not disclosing the size of the investment. The entry of a sovereign fund into digital asset tokenization underscores the rapid convergence of traditional finance and Web3 infrastructure, as Mubadala aims to broaden participation in illiquid private equity deals that traditionally required deep institutional relationships or private banking channels. Coinbase Asset Management previously launched the CUSHY tokenized credit strategy in April, targeting public digital credit, private asset-backed lending and tokenization-related returns across Ethereum, Solana and Base networks.
Tokenized real-world assets have expanded rapidly across institutional capital markets, with industry data from a16z crypto indicating that the market cap of tokenized equities jumped nearly 400 percent to roughly $1.7 billion in mid-2024. KAIO provides the infrastructure that issues and administers Mubadala Capital's tokenized fund, joining firms including Hamilton Lane, Brevan Howard and Laser Digital that use its platform. The company currently has $144 million in tokenized funds on its platform and revealed that the tokenized fund initiative has already attracted approximately $75 million from both conventional and crypto-native institutional allocators. KAIO previously supported onchain products linked to BlackRock, Brevan Howard, Hamilton Lane and Nomura's Laser Digital, with Tether leading an $8 million KAIO funding round in April, bringing total funding to $19 million.
To access the tokenized fund, qualified investors must complete off-chain onboarding and identity verification through a licensed fund administrator. Once approved, users receive a verified on-chain profile that restricts visible assets and transaction permissions according to jurisdictional regulatory rules. The infrastructure platform KAIO handles technical compliance and asset issuance, with the company previously spearheading tokenization infrastructure for prominent global asset managers including BlackRock, Brevan Howard, Hamilton Lane, and Laser Digital. Max Franzetti, head of Mubadala Capital Solutions, stated that the strategy was built on differentiated access to deal flow, co-investment and global network that most investors cannot reach on their own. The product remains available only to qualified institutional and accredited investors, with transfers following KAIO's compliance controls and rules set by the fund and its regulated providers.
The launch aligns with the UAE's broader ambition to become a hub for tokenized finance, with Abu Dhabi and Dubai emerging as some of the most active jurisdictions for digital assets. As regulated assets become programmable, they can become part of a broader onchain economy that is more transparent, composable and accessible to qualified investors in eligible jurisdictions. The entry of a sovereign fund into digital asset tokenization underscores the growing trend of major investment firms embracing tokenization, with BlackRock, Franklin Templeton, Apollo, Fidelity, Janus Henderson and Invesco all launching or expanding tokenized fund offerings, mostly focused on U.S. Treasuries, money market funds and private credit. Mubadala Capital is the alternative asset management subsidiary of Abu Dhabi's Mubadala Investment Company, with its alternative investment operations reporting about $60 billion in assets under management.
