Why This Aussie Asset Manager is Tokenizing its $97M Fixed Income Fund

Backed, Sonic (formerly Fantom) and Chainlink have teamed up with Australian hedge fund Fortlake Asset Management to turn its Sigma Opportunities Fund into a tokenized investment.

Managed by Fortlake—recently named Fixed Income Manager of the Year in Australia— the fund’s units will be transformed into digital tokens, a process called tokenization, where real-world assets are represented on a blockchain, the companies announced exclusively to Decrypt. 

The collaborations seek to simplify asset management by bringing traditional financial assets on-chain and expanding access to decentralized finance (DeFi).

The trio believes the fund’s tokenization leads to new opportunities within DeFi, “such as integrations with lending markets, use as a high-yield stablecoin savings solution, or as margin trading collateral.”

“Partnering with Backed, Sonic, and Chainlink to tokenize the Sigma Opportunities Fund is a substantial development in the way we provide access to our fund for the rapidly growing digital asset investor base,” Christian Baylis, founder and CIO of Fortlake said in a statement. “We believe this collaboration marks the beginning of a new era in traditional asset management fundraising.”

As a global fixed-income investment strategy targeting high yield, the fund targets returns between 7 and 10%, according to Fortlake’s own product disclosure statement.

How it works

Tokenization will occur using Backed’s Tokenization-as-a-Service (TaaS) platform. Those tokens will be backed 1:1 by units, ensuring their value corresponds to the real-time Net Asset Value (NAV) of the fund—essentially the fund’s worth per share.

“Tokenizing the Fortlake Sigma Fund is a major step forward in the blockchain landscape,” said Adam Levi, co-founder of Backed. “It showcases how institutions can use blockchain technology to simplify back-office operations and reach new capital.”

The tokens will then be integrated into the Sonic blockchain, a platform capable of processing 10,000 transactions per second with one-second finality. Chainlink’s SmartData technology also ensures the fund’s value (NAV) is accurately recorded on the blockchain, the trio said.

Chainlink’s Proof of Reserves feature verifies that the fund always backs the tokens, so investors know their assets are secure. Chainlink also uses CCIP (Cross-Chain Interoperability Protocol) to allow these tokens to work across multiple blockchains.

Is tokenization the future?

The partnership points to the growing interest in blockchain-based solutions for asset management. 

Recently, stablecoin issuer Tether launched Hadron, a tokenization platform for digital and real-world assets that lets users tokenize various assets, from stocks and bonds to stablecoins and loyalty points.

A few weeks back, Japan’s SBI Digital Markets announced it is developing a cross-border framework for tokenized assets, connecting regulated digital asset exchanges across multiple regions to boost liquidity and lower costs.

With institutions like BlackRock and JP Morgan exploring tokenization, the Bank of America predicts the sector could reach $16 trillion in value within the next 15 years.

Edited by Sebastian Sinclair