The firm writes that shares in the fund will be issued using Franklin’s proprietary blockchain-enabled transfer agency platform, giving investors the benefit of the transparency, security, accuracy and immediacy made possible by blockchain technology.

The fund, which is scheduled for launch over the next few months, will be the first tokenised UCITS fund on a public blockchain using in house capabilities and technologies in Luxembourg, and is expected to be distributed widely throughout Europe pending regulatory approval, the firm writes. Further details will be available to investors in due course. 

Franklin Templeton’s Sandy Kaul, Head of Digital Assets and Industry Advisory Services, says: “We want to be known as a leader in developing innovative solutions that align with the needs of our clients’ in terms of business growth, operational efficiency, and scalable best practices.  Disruptive technology and innovation in financial services is reshaping the industry and changing the fundamental rules for how to attract, secure, and serve clients.  We believe that in the future, there may be opportunities to create other tokenised financial products, including interoperability with other digital assets and blockchain native facilities.  We are committed to continuing to explore these opportunities as part of our broader digital assets strategy.”

The expansion of this new capability signals Franklin Templeton’s confidence and belief in Web3 and digital technologies which have the potential to reshape the asset management industry by creating new opportunities to more closely link traditional asset management products and services to transactional payments.  Over the last four years, the firm has developed the resources, reach and expertise to support innovative solutions from beginning to end, including regulatory, custody, digital wallet creation, and the legal and risk management structures required for long-term success.

In April 2021, Franklin Templeton launched the Franklin OnChain U.S. Government Money Fund2, the first US-registered mutual fund to use a public blockchain to process transactions and record share ownership.

Roger Bayston, EVP, Head of Digital Assets, Franklin Templeton, says: “We have been active participants and builders in the digital asset ecosystem since 2018 and have seen the transformative power of blockchain technology firsthand.  As technological innovation continues at pace, we continue to work closely with regulators around the world to introduce innovative solutions to the marketplace. Leveraging our in-depth knowledge of blockchain ecosystems and proprietary technologies, we are well positioned to introduce products that serve to further the understanding and accessibility of digital assets within the broader community.”

The firm writes that blockchain is a decentralised digital ledger that records and verifies transactions in a secure, transparent, and immutable way. It enables peer-to-peer transactions without the need for intermediaries, ensuring that all data is permanently recorded and visible to everyone.  While traditional databases can be vulnerable to security breaches, blockchain provides improved security and a reduction in administrative burden.

The benefits of asset tokenisation include increased liquidity, accessibility, composability and transparency, the firm says. By applying the benefits of blockchain technology to a traditional product, investors will benefit from efficient transfer and cost-effective administration.

Matt Harrison, Head of Americas (ex-US), Europe & UK at Franklin Templeton, says: “This new fund will mark a pivotal step in our global commitment to leverage blockchain technology for clients beyond the US.  We continuously focus on innovation and long-term value creation for our clients, and we want to equip them with tools, services and knowledge to make informed decisions.  With our proprietary solutions, we offer enhanced security, transparency, and efficiency, further solidifying our leadership in the rapidly evolving digital asset space.”

The Octopus Natural Capital Strategy (the Strategy) aims to generate high-integrity carbon removal credits through comprehensive conservation and land management. It will look to provide investors with attractive, sustainable returns and the opportunity to accelerate the transition to net zero by kick-starting the natural capital economy.

The Strategy will initially have a UK focus, looking at the acquisition of land-based assets with conservation potential, and will be exploring ancillary revenue streams tailored to each project and locality: whether this is property restoration, biodiversity net gain credits, regenerative agriculture, ecotourism or renewable energy.

The Strategy will be led by Alex Godfrey, recently appointed as Investment Director. Alex is a seasoned professional in the field of natural capital, regenerative agriculture and climate finance, with over 15 years of experience in investment banking, venture building and environmental consulting. Godfrey joins Octopus from Savills, where he was Head of Natural Capital (Rural and Projects), leading the development and delivery of innovative solutions for landowners, investors and policymakers, leveraging his expertise in carbon markets, biodiversity, and water.

Reporting to Mike Toft, Senior Fund Manager, the firm writes that Godfrey will be honing the Octopus approach to high quality credits, focusing on data-led monitoring, co-benefits of biodiversity, improving the ecosystem, permanence and transparency. The firm writes that he will also play a key role in fostering strong relationships with local communities and sourcing best-in-class, trusted operators to partner with ensuring the Strategy is built on quality conservation.

Octopus Investments has set itself an ambitious goal to grow its assets under management from GBP13 billion to GBP50 billion by 2030. The firm writes that a large proportion of this growth will come from the expansion of the institutional business. In recent years Octopus has launched several funds, including the Octopus Sustainable Infrastructure Fund and the Octopus Affordable Housing Fund. This move into natural capital is the next part of this plan, the firm says.

Mike Toft says: “Climate change is the biggest challenge of our time and while reducing carbon emissions to reach net zero targets is key to addressing this challenge, we will not reach this goal by decarbonisation alone. We know that more high-quality carbon credits need to be generated to help offset carbon and accelerate our net zero efforts.

“We also know that companies want to do the right thing for all stakeholders; the planet, their customers, shareholders and employees. With their own net zero targets approaching, they too are increasingly realising that offsetting will need to play a critical part in that journey. We are aiming to meet this demand through our holistic, nature-based strategy and with Alex now on board with his on the ground conservation experience, we are even better placed to do so.”

Alex Godfrey says: “I have seen over the years how Octopus makes use of its capital. With its entrepreneurial approach and ability to provide innovative solutions to sectors ripe for change, Octopus aims to tackle some of society’s biggest challenges. In the past there has been huge success with solar power, care homes and the energy transition.

“I’m excited to be part of this next priority area for Octopus with natural capital having similar characteristics to these previous big wins; a specialist area in an underdeveloped part of the market that is expected to grow exponentially. I look forward to bringing this to life, creating impact and generating sustainable investment returns for our investors.”

More information can be found here.