Aditum Alternatives has filed a new patent application, requesting prioritized examination from the USPTO. Their latest application pertains to technology at the nexus of private market funds and blockchain; and is a continuation of provisional applications filed in 2021. The technology, commercially known as the Aditum Aqueduct, enhances the operation of drawdown funds invested in private market assets, and is applicable to a variety of regulatory regimes, such as private funds (e.g., 3c7 exempt), ’40 Act registered funds and private Business Development Companies (BDCs), including those registered under the ’34 Act. The Aqueduct unitizes unfunded commitments, capital calls and distributions, making fund interests fungible and suitable for tokenization on a blockchain. The Aqueduct also provides a capability referred to as “Commitment Vintages,” which allows a drawdown fund to operate over multiple capital cycles, adding additional, new, non-dilutive capital with each cycle.
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“Globally there is over $10T allocated to private markets of which about $3T is dry powder or unfunded commitments. With $3T of dry powder, for the universe of private market funds to be accessible as tokens on a blockchain, dry powder must be as fungible as equity. This is one of the features of the Aqueduct.” said Ken McGuire, President of Aditum Alternatives. He continued, “Over the coming decade, tokenized digital assets are headed for ubiquity, like cell phones. Virtually everyone and every legal entity will have a digital wallet holding their tokenized digital assets. Tokenization can improve the liquidity of illiquid assets by making them easier to find, manage and price. Tokenization can also make them easier to own and service, without relying on traditional banking services. These capabilities depend on the fungibility of digital assets. Even non-fungible tokens (NFTs) become fungible via fractionalization.”
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Compared with traditional, cash upfront funds of private market assets, Aqueduct administered drawdown funds can provide investors:
- more efficient asset utilization (e.g., no cash drag),
- improved liquidity, and
- protection from dilution.
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