Wellington bets on tokenized funds as client demand grows (3:37)
Traditional asset managers are increasingly exploring tokenization not as a radical reinvention of finance, but as a new delivery rail for familiar products.
That was the message from Mark Garabedian, head of digital assets at Wellington Management, during a conversation with TheStreet Roundtable.
Speaking with host Jackson Hinkle, Garabedian said tokenization is less about creating entirely new asset classes and more about enhancing how existing products are issued, owned and transferred.
Related: What is tokenization? Explained
'New technology for a delivery method'
Garabedian framed tokenization as an evolution in infrastructure rather than a departure from core investment principles.
“With tokenization, really what you are doing is you are just utilizing new technology for a delivery method,” he said. “What you are delivering is still going to be an ETF, it’s still going to be a fund structure, it’s still going to be a private fund in cases, it’s still going to be [...] a stock, an equity product.”
In his view, the underlying investment mandate does not change.
A tokenized fund can still hold treasuries, equities or other traditional assets. The difference lies in how ownership is recorded and transferred, via blockchain-based tokens rather than paper-based registries.
Garabedian emphasized that tokenization offers both operational efficiencies and added utility for clients.
“There are efficiencies that can be gained but there’s also more utility that the end clients will be able to use,” he said.
For Wellington, client demand is central.
“What we always want to make sure is that we are in a position to be able to deliver our services to our clients in the format that they want to take them in,” he added.
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Tokenized fixed-income strategy
Wellington’s initial move into digital assets came through its sub-advisory business, where the firm manages investments on behalf of product issuers.
Garabedian explained that the company was approached by Singapore-based issuer FundBridge to manage an ultra-short-duration fixed-income strategy offered in tokenized form. Instead of recording ownership in a traditional register, “the ownership shares are delivered to them in token form,” he said.
From an operational standpoint, the shift was less dramatic than some might expect.
“This is business as usual for Wellington,” Garabedian noted, adding that the firm did not require new portfolio management systems or processes to manage the underlying treasuries.
The experience, which also involved digital transfer agent Libera handling token minting and burning, demonstrated what he described as clear “product market fit” and a commercial opportunity.
Education as the core challenge
While the technology itself may be straightforward, Garabedian said education has been the most critical component, both internally and externally.
As he recounted, an early presentation to the firm’s CEO and leadership team “really resonated,” but broader buy-in required ongoing education across the organization.
In his assessment, one of the biggest values he brings to the firm is helping colleagues and clients understand what tokenization is, and what it is not.
Rather than positioning blockchain as a disruptive force that replaces traditional finance, Garabedian described it as an enabling layer.
Related: As Wall Street eyes tokenization, a lack of market infrastructure presents hurdles
