The promise of tokenising private-fund LP interests and GP-stake economics has been theoretically attractive and practically frustrating for most of the last five years. The custody infrastructure was incomplete, the regulatory clarity was patchwork, and the institutional buyer base was unwilling to underwrite tokenised structures at scale. Each of those constraints has eased materially in the last 24 months. The plumbing is now genuinely ready, and what was a niche thesis has begun to convert into institutional flow.

Three structural advances have unlocked the category. First, regulated institutional custody — the topic of our April 2027 piece on regulated digital assets — has matured to the point where major banks and prime brokers offer tokenised-asset custody at fiduciary standards, removing the operational risk that had blocked institutional adoption. Second, the licensed stablecoin and tokenised-deposit frameworks across the EU, UK, UAE, Singapore, and Hong Kong now provide the settlement infrastructure for transferring tokenised positions at speeds and cost economics that traditional secondary processes cannot match. Third, the GP-stakes market — where strategic LPs and specialist funds buy minority equity in fund management firms — has begun adopting tokenised structures as the standard form of expressing the buyer's interest, particularly where multiple buyers participate in a single round.

The practical use cases that are now functioning include LP secondary tokenisation (where LP positions in mature funds are tokenised and traded among institutional buyers without the legal-papering burden of traditional secondary processes), GP-stake fractionalisation (where minority equity in a fund manager is held by 5–15 institutional buyers via tokenised SPV), and continuation-vehicle architecture (where the rolled-over LP positions in a CV are tokenised to simplify ongoing transferability). All three categories have moved from pilot to commercial in the last 18 months.

The cohort of institutional buyers genuinely participating remains narrow — a couple of dozen sovereign-adjacent platforms, scaled family offices, and dedicated digital-asset-strategy funds. But the cohort is growing, and the plumbing is now standardised enough that adoption beyond this cohort is a matter of time, not technology. For GPs raising new vintages, tokenised LP interests now represent a genuine fundraising channel; for LPs holding mature positions, the secondary economics are materially better than they were three years ago.

Brilwood's Capital practice has been advising on tokenised-LP and GP-stake structures since 2026. The category has crossed the line from thesis to flow.