Federated Hermes has partnered with Prometheum to develop tokenized investment funds that can be distributed through regulated U.S. brokerage infrastructure, with the first product expected to reach the market in the first quarter of 2027. The collaboration is designed to move tokenized funds beyond crypto-native platforms and into brokerage accounts and adviser relationships already used by U.S. investors. Federated Hermes managed $911.6 billion as of June 30, 2026.
According to the official partnership announcement, Federated Hermes will contribute its investment-management capabilities and existing tokenization experience, while Prometheum will provide infrastructure through its SEC-registered and FINRA-member broker-dealer subsidiaries. The firms have not yet disclosed the investment strategy, blockchain network, fund structure or eligibility requirements for the inaugural product.
Prometheum Connects Tokenized Funds to Brokerage Distribution
The partnership divides the operational responsibilities across Prometheum’s regulated entities. ProFinancial will support distribution of the tokenized products, while Prometheum Capital will provide custody, clearing and settlement for customers and make Federated Hermes products available to introducing broker-dealers through its correspondent clearing platform. The emphasis is therefore not simply on issuing fund shares on a blockchain, but on connecting those shares to conventional securities-distribution channels.
Prometheum’s broader infrastructure also includes a digital transfer agent and Prometheum ATS, an alternative trading system intended for secondary trading of blockchain securities. However, the October 13 announcement does not specifically state that Federated Hermes’ first tokenized fund will begin secondary-market trading on the ATS at launch. That distinction matters because issuance, custody, distribution and secondary liquidity are separate stages in the securities lifecycle.
The model differs from tokenization projects built primarily for direct interaction with on-chain markets. Federated Hermes and Prometheum are instead targeting broker-dealers and registered representatives as distribution intermediaries. Blockchain becomes part of the ownership and settlement infrastructure while the investor-facing channel remains recognizable to traditional financial institutions. Prometheum says its market stack is designed to support securities ranging from mutual and money market funds to debt, equities and ETFs.
Asset Managers Expand Tokenized Fund Strategies
Federated Hermes joins a widening group of traditional managers moving fund products onto blockchain rails. Invesco has filed for a tokenized fund targeting stablecoin reserve management, using Superstate for blockchain-integrated shareholder records. New York Life Investment Management has meanwhile launched a tokenized high-yield corporate bond strategy through Centrifuge, bringing an existing credit approach into an on-chain fund structure.
Other managers are testing different operating models. Baillie Gifford has introduced a tokenized fixed-income product using Ethereum and Solana infrastructure, while Bitwise has connected tokenized fund shares with DeFi collateral markets. The common development is not one standardized tokenization architecture, but the migration of fund ownership, distribution and settlement functions onto increasingly varied blockchain infrastructure.
Federated Hermes’ collaboration is notable because it focuses heavily on connecting tokenization with regulated brokerage distribution rather than building a standalone crypto investment venue. The company said broker-dealer and RIA clients are increasingly interested in on-chain access to traditional investments, although the announcement provides no launch AUM, investor commitments or projected transaction volumes for the first fund.
The Q1 2027 target therefore represents a planned commercial launch rather than demonstrated adoption. The measurable milestone will be whether Federated Hermes and Prometheum move from partnership infrastructure to an identified, live fund distributed through U.S. brokerage channels, including disclosure of its strategy, blockchain structure, investor eligibility and operational settlement model.