Key Takeaways
- • Federated Hermes, which reported $911.6 billion in assets under management, has partnered with crypto infrastructure provider Prometheum to distribute tokenized funds through brokerage and adviser channels.
- • The first tokenized product is expected in the first quarter of 2027; the announcement did not identify the fund, its underlying investments, or the blockchain it will use.
- • Prometheum's SEC-registered, FINRA-member broker subsidiaries will provide custody, clearing and settlement, and its correspondent clearing platform will make Federated Hermes products available to introducing brokers.
- • Kevin Barr, Federated Hermes' director of digital assets, said demand from broker-dealer and RIA clients is driving the initiative.
- • The deal reflects a broader trend of asset managers placing funds on blockchain infrastructure, with tokenized money market funds cited as the leading use case.
Summary
Federated Hermes, an investment manager with $911.6 billion in assets under management, has partnered with crypto infrastructure provider Prometheum to bring tokenized funds to brokerage clients. According to the announcement made Tuesday, the first product is expected in the first quarter of 2027. The collaboration pairs Federated Hermes' investment management business with Prometheum's SEC-registered, FINRA-member broker subsidiaries.
The firms aim to make tokenized products available through the brokerage accounts and adviser relationships investors already use. Prometheum subsidiary ProFinancial will support distribution, while Prometheum Capital will provide custody, clearing and settlement for its customers. Prometheum Capital will also make Federated Hermes' tokenized products available to introducing brokers through its correspondent clearing platform. Prometheum's network additionally includes a secondary trading platform and an SEC-registered digital transfer agent, although the announcement did not specify whether the initial Federated Hermes product will support secondary trading at launch.
Kevin Barr, director of digital assets at Federated Hermes, said tokenized funds are "the logical next step for our broker-dealer and RIA clients, who increasingly see demand for on-chain access to traditional investments." Barr said the partnership would allow the firm to distribute products through regulated intermediaries while applying the operational and investment standards used across its existing fund lineup.
Aaron Kaplan, Prometheum's founder and co-CEO, said that "tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system where most Americans invest." Kaplan described the partnership as a potential model for combining an asset manager with registered brokers providing offering, custody and clearing services.
The firms highlighted tokenized money market funds as a use case that has demonstrated investor interest in blockchain-based access to traditional investments. The announcement did not identify the first fund, its underlying investments or the blockchain it would use. The partnership reflects the growing overlap between crypto and traditional finance, as crypto platforms expand into tokenized stocks and asset managers bring investment funds onto blockchain infrastructure.
The firms aim to make tokenized products available through the brokerage accounts and adviser relationships investors already use. Prometheum subsidiary ProFinancial will support distribution, while Prometheum Capital will provide custody, clearing and settlement for its customers. Prometheum Capital will also make Federated Hermes' tokenized products available to introducing brokers through its correspondent clearing platform. Prometheum's network additionally includes a secondary trading platform and an SEC-registered digital transfer agent, although the announcement did not specify whether the initial Federated Hermes product will support secondary trading at launch.
Kevin Barr, director of digital assets at Federated Hermes, said tokenized funds are "the logical next step for our broker-dealer and RIA clients, who increasingly see demand for on-chain access to traditional investments." Barr said the partnership would allow the firm to distribute products through regulated intermediaries while applying the operational and investment standards used across its existing fund lineup.
Aaron Kaplan, Prometheum's founder and co-CEO, said that "tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system where most Americans invest." Kaplan described the partnership as a potential model for combining an asset manager with registered brokers providing offering, custody and clearing services.
The firms highlighted tokenized money market funds as a use case that has demonstrated investor interest in blockchain-based access to traditional investments. The announcement did not identify the first fund, its underlying investments or the blockchain it would use. The partnership reflects the growing overlap between crypto and traditional finance, as crypto platforms expand into tokenized stocks and asset managers bring investment funds onto blockchain infrastructure.
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