WHAT’S POPPIN’ THIS WEEK?
Hey crew, this week we’re diving deeper than the Titan submersible into the dark depths of fund tokenisation.
Every conference panel, every consultant deck, every ambitious product person is shouting some version of:
“Tokenised funds will transform distribution!”
…and when you ask how, the room goes quieter than a compliance officer in emoji training.
The hype is everywhere. The understanding is… well… missing.
And whilst the FCA are trying to encourage tokenisation. Some in the industry are politely sipping tea and saying:
“Absolutely not. You may want innovation, but behave yourself.”
Let’s shuck this down.
PART 1:
🚂 All Aboard
Everybody wants to be seen riding the tokenisation wagon:
product teams (“We need a tokenised UCITS before Q2!”)
platforms (“We’re exploring DLT partnerships…”; translation: no)
asset managers (“We have a roadmap”; translation: a slide title)
consultants (“This changes everything!”; translation: please hire us)
regulators (“We are open to innovation”; translation: under strict supervision)
Tokenisation is the perfect corporate accessory:
cool enough for a press release, vague enough to never be wrong.
PART 2
😶🌫️ What Tokenisation Actually Is
Here is the unsexy truth:
Tokenisation does not change the fund.
It changes the record-keeping system that tracks who owns the fund.
Instead of the transfer agent maintaining a traditional ledger,
a distributed ledger records the same data.
That’s it.
That’s the movie.
Tokenisation is basically:
“What if the TA system were… newer?”
Useful? Yes.
Revolutionary? Only in the same way upgrading from Internet Explorer 6 is “revolutionary.”
PART 3:
🔴 What Tokenisation Doesn’t Do
Let’s pop some illusions:
❌ It does not open new distribution channels.
❌ It does not bypass platforms.
❌ It does not create new investor types.
❌ It does not magically enable intraday liquidity.
❌ It does not remove the need for KIDs, prospectuses, or oversight.
❌ It does not make a bad fund good.
❌ It does not simplify anything for advisers.
Most importantly:
Tokenisation does not fix the operational messiness that actually slows distribution.
If your data is inconsistent now…
it will be inconsistently recorded on a blockchain later.
Congratulations, you’ve invented faster mistakes.
PART 4
🆘 The Real Reason Tokenisation Exists: Efficiency in the Boiler Room
Where tokenisation can help:
faster settlement (in theory)
better audit trails
reduced reconciliation friction
cleaner investor records
fractionalisation — handy in cross-border markets
more modular plumbing for future platforms
Note the pattern?
All infrastructure, no revolution.
This is a back-office story, marketed like a front-office fairytale.
PART 5
😵💫 The Kernel of Truth: Nobody is Ready for This
The gap between tokenisation hype and actual operational readiness is… wide.
Platforms
Need new custody permissions, TA interfaces, data standards, reporting integrations, AML solutions, and risk frameworks.
Transfer Agents
Need replatforming, new controls, new oversight models, and complete operational redesigns of process flows.
Compliance teams
Need new failure-mode mapping (“What if the blockchain breaks?” is not an approved sentence.)
Auditors
Need new templates.
Fund boards
Need to understand the thing before approving it (this may take until 2041).
Advisers
Will need to explain tokenised units to clients (“No, Janet, it’s not ‘crypto’ — well… sort of… but… no.”)
Everyone wants the upside.
Nobody wants to own the plumbing.
PART 6
🧞♀️ The Mirage: Why Hype Persists
Tokenisation is the perfect mirage:
futuristic enough to impress
vague enough to manipulate
harmless enough to announce
complex enough that no one calls your bluff
It’s innovation PR with a side of popcorn.
And let’s be honest:
every fund manager wants a “Tokenisation Strategy” slide.
It looks amazing in investor decks next to ESG and AI.
PART 7
💼 The One Place Tokenisation Might Actually Change the Game
Cross-border distribution.
IF (big if) we see:
standardised DLT rails
interoperable custody models
platform adoption
harmonised reporting schemas
regulatory alignment
TA–platform integration standards
…then tokenisation could reduce friction between domiciles and increase velocity of transactions.
It’s a 10–15 year story, not a 2025 one.
PART 8
🤷♂️ So What Should Fund Managers Actually Do?
Three things:
1️⃣ Get literate, not loud.
Understand tokenisation deeply enough to talk about it sensibly.
Don’t issue an “innovation announcement.”
Issue a feasibility statement.
2️⃣ Fix your operations first.
No DLT solution will save you from
inconsistent share-class data
sloppy factsheets
mismatched KIDs
broken settlement files
poor oversight
Solve these → then talk blockchain.
3️⃣ Talk to platforms early.
No platform = no distribution.
Tokenisation that platforms can’t process is… theatre.
Or, if your ABRDN, throw the kitchen sink at it and buy a tokenisation platform. It’ll either be:
“Come buy books online!” - Bezos
OR
“Meetings should be in the METAVERSE!” - Zuck
🍿 FundFlow Take
Tokenisation is good.
Tokenisation is progress.
Tokenisation will eventually make distribution smoother.
But tokenisation is not:
a revolution
a new wrapper
a new distribution engine
a shortcut to flows
It’s just better plumbing.
Let’s stop pretending the popcorn machine 🍿 is a rocket engine.
If you enjoyed that and want to be part of the conversation, submit your questions, thoughts, ideas and suggestions. We’ll be running a Q&A in a few weeks’ time.
Until next week!
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