SKN | Flow Capital Targets $150M Fund Tokenization as Blockchain Finance Expands

Key Points:

• Flow Capital plans to tokenize a $150M private credit fund.
• Move aims to raise an additional $30M via blockchain distribution.
• Experts warn tokenization does not guarantee liquidity.

Flow Capital Moves Into Tokenized Finance

Flow Capital Partners is preparing to bring its $150 million private credit fund onto blockchain infrastructure through DigiFT. The initiative is part of a broader strategy to expand the fund’s reach and tap into blockchain-based capital markets.

The firm aims to raise an additional $30 million in tokenized shares by the end of 2026, increasing the fund’s total size to $250 million while targeting a net return of approximately 12%.

Tokenization as a Distribution Channel

The move reflects a growing trend where traditional financial products are being distributed through blockchain networks. Instead of replacing the underlying asset, tokenization allows fractional ownership and broader investor access through digital representations of real-world assets.

This approach is increasingly being adopted by major institutions, including BlackRock and JPMorgan, which have both launched tokenized fund products in recent years using blockchain infrastructure like Ethereum.

Liquidity Misconceptions Persist

Despite the growing enthusiasm, industry participants caution against overstating the benefits of tokenization. Executives emphasize that simply placing an illiquid asset onchain does not automatically make it easier to trade.

Market depth, buyer demand, and secondary market infrastructure still determine whether an asset is truly liquid. Tokenization may improve access and settlement efficiency, but it does not eliminate fundamental constraints tied to the underlying asset class.

Growth of the Tokenized Asset Market

The broader tokenized asset market continues to expand rapidly, with total onchain value approaching $30 billion. Tokenized US Treasury products remain the dominant segment, followed by commodities and asset-backed credit instruments.

This growth highlights increasing institutional interest in bridging traditional finance with blockchain-based systems, particularly for yield-generating assets.

Strategic Shift Toward Hybrid Finance

Flow Capital’s initiative underscores a larger shift toward hybrid financial models that combine traditional asset structures with blockchain distribution. By leveraging tokenization, firms aim to reach new investor bases while maintaining familiar financial frameworks.

Balancing Innovation With Market Reality

While tokenization offers efficiency, transparency, and broader accessibility, its long-term success will depend on whether real liquidity, regulatory clarity, and investor demand can keep pace with technological adoption.

Flow Capital’s effort may serve as another test case in determining whether blockchain can meaningfully transform private credit markets—or simply enhance how they are accessed and distributed.