Sector convergence opportunities

Who funds the future?

How private credit, tokenisation and innovation are reshaping the funding landscape

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Opportunity squared:

Compare the most dynamic areas for growth and collaboration at the intersection of sectors. Assess the most promising dimensions for strategic expansion and partnership.

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Opportunity squared:

Compare the most dynamic areas for growth and collaboration at the intersection of sectors. Assess the most promising dimensions for strategic expansion and partnership.

Explore →

Trends to watch in 2026

The pace of change facing businesses today means the future can’t be understood as a single event or forecast. It is shaped continuously by shifting regulation, technology, markets and capital. The Continuum+ brings together insight from across Simmons & Simmons’ global practice to help you understand what is changing now – and what that means in practical terms for strategy, investment and risk.

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To discuss these insights in more detail, please get in touch with your local Simmons & Simmons contact.

© Simmons & Simmons LLP and its licensors. All rights asserted and reserved. This document is for general guidance only. It does not contain definitive advice. Simmons & Simmons LLP is a limited liability partnership registered in England & Wales with number OC352713 and with its registered office at CityPoint, One Ropemaker Street, London EC2Y 9SS, United Kingdom. It is authorised and regulated by the Solicitors Regulation Authority and its SRA ID number is 533587. The word “partner” refers to a member of Simmons & Simmons LLP or one of its affiliates, or an employee or consultant with equivalent standing and qualifications. A list of members and other partners together with their professional qualifications is available for inspection at the above address.

Who funds the future?

How private credit, tokenisation and sector convergence are reshaping the funding landscape

Yuval Noah Harari observes in his landmark book Sapiens1 that money is “the most universal and efficient system of mutual trust ever devised.” In ancient times, that trust underpinned coins and ledgers. Today, trust is being reinvented by private credit, tokenisation and sector convergence.

This reinvention brings challenges, from regulatory complexity to operational risk and multi‑jurisdictional hurdles. But it also opens new possibilities: unlocking capital, widening investor access and enabling entirely new ways of structuring, funding and trading assets. The decisions we make and the innovations we embrace today will shape the future of finance for years to come.

The asset class of the future

Private credit has emerged as one of the defining pillars of alternative finance and the asset class of the new economy. Once a niche form of direct lending, it is now a major source of capital for companies of all sizes, particularly those underserved by traditional banks. The scale of this shift is striking: the global private credit market has now surpassed $3.5 trillion in assets under management2, with deployment volumes growing sharply year-on-year across corporate, asset-backed, real estate and infrastructure lending.

As the private credit market matures, asset managers are building specialised teams and dedicated funds that go beyond straightforward direct lending and structuring more complex, bespoke solutions. Credit investors can take equity positions through restructurings or “loan to own” strategies.

What makes private credit so compelling is its ability to deliver customised solutions at speed, something conventional banks often struggle to do. Regulatory constraints and internal policies can slow banks down, whereas private credit providers can act quickly, tailoring terms to specific needs.

“Investment banks have long played an important role in originating and structuring these deals,” explains Ester Chow. “What’s changed is the breadth of options now available. Alongside banks, some investors and debt managers are choosing to originate and hold assets directly, giving borrowers greater flexibility in how transactions are executed.”

Partnerships between banks and private credit funds are increasingly common, expanding funding sources while introducing new strategic and risk considerations. “We’re seeing a clear continuous evolution in sources of funding” observes Amer Siddiqui. “And as a result, funders are working together in more flexible ways. Sometimes it’s purely private credit, sometimes it’s a mix of bank and private credit.”

This trend is particularly pronounced in Asia. “There’s a lot of collaboration,” adds Ester. “Banks face regulatory limits and can’t always serve middle‑market or non‑standard loans, while private credit funds have the appetite but not always the local networks. So, banks often originate the loan but partner with private credit funds to take on exposure. Both sides benefit: the fund gets access to deals with yield, and the bank keeps its clients happy within its risk limits.”

The rise of creative financing structures demands agility from all participants, from front‑office teams and in‑house counsel to external lawyers. Institutional investors are expanding private credit teams and setting up umbrella funds or funds‑of‑funds to capture new opportunities, while banks increasingly partner with these investors to navigate the evolving landscape.

Growth, however, sometimes brings risks. Some funders may prioritise yield, potentially stretching into risk profiles that traditional banks would be forced to approach more cautiously. Amer says “The challenge in devising these innovative and collaborative structures is ensuring that borrowers, banks and private credit lenders strike the right balance of risk and reward, reflecting their unique positions in the ecosystem, and that the resulting push and pull ultimately supports a sustainable, mutually beneficial relationship.”

Against this backdrop, market discussions suggest stress is building in parts of the private credit market, with fewer opportunities for amend and extend and a gradual shift towards restructurings.

Despite these complexities, private credit continues to create significant opportunities for investors and borrowers alike. As of late 2025, private credit firms had grown to an estimated $1.7 trillion in global lending influence3, reshaping the banking landscape and redefining how capital is allocated across sectors.

“Both sides benefit: the fund gets access to deals with yield, and the bank keeps its clients happy within its risk limits.”

Ester Chow - Partner →

“Borrowers, banks and private credit lenders must strike the right balance of risk and reward.”

Amer Siddiqui - Partner →

“Tokenisation is about reconfiguring the 'plumbing' of the financial markets.”

Oliver Ward - Partner →

“In the future, there won’t be a distinction between crypto, tokenised assets and traditional securities.”

Gordon Ritchie - Managing Associate →

“We’re moving from a Monday-to-Friday system to a 24/7 financial world.”

Yingyu Wang - Partner →

Tokenisation takes flight

Financial markets rarely change overnight but the infrastructure that underpins them is starting to look increasingly out of step with the digital economy it is meant to serve. Blockchain technology, and tokenisation in particular, offers a way to modernise how assets are issued, traded and settled. It’s replacing processes designed in the mid-20th century with systems built for instant settlement, global access and continuous trading.

What began on the fringes of crypto is now drawing in mainstream banks, asset managers and exchanges. By late 2025, tokenised real-world assets had reached roughly $35 billion on-chain4, up sharply from earlier in the year. US Treasuries alone accounted for around $9 billion, demonstrating a strong appetite for blockchain-based, liquid sovereign debt.

“Tokenisation is about reconfiguring the 'plumbing' of the financial markets, creating new products and services that are not feasible with conventional technology,” says Oliver Ward. “Blockchains allow infrastructure providers to do things better, cheaper or more flexibly than the current technology allows.”

So far, adoption has been cautious but deliberate. Early projects have focused on simpler instruments, such as tokenised bonds, funds and deposits, where efficiency gains are most obvious and regulatory hurdles lower. But now, the pace of growth hints at a broader shift, as institutions test whether tokenisation can really cut costs, improve liquidity and open new investor channels. This momentum is particularly evident in Singapore, which has positioned itself as a hub for digital finance by balancing regulatory clarity with innovation.

“After a few early waves, the timing is finally right,” reflects Yingyu Wang. “What’s changed is interoperability and regulation. Banks no longer need to operate in silos, and regulators in many jurisdictions have given institutions the comfort they needed to take the next step.”

Tokenised equities, on-chain funds and cross-border settlement solutions point to a future in which blockchain isn’t related to a separate asset class, but a new operating standard. “In the future, there won’t be a distinction between crypto, tokenised assets and traditional securities,” predicts Gordon Ritchie. “It will simply be how markets work.”

Again, this is highly relevant in Asia, where fintech adoption is rapid and investors are increasingly expecting markets to operate continuously. “We’re moving from a Monday-to-Friday system to a 24/7 financial world,” Yingyu observes. “If traditional institutions don’t provide that, fintechs will.”

Crypto regulation under pressure

The pace and shape of the crypto revolution will be dictated as much by regulators as by technologists. The market moves fast, constantly testing the limits of rules designed for traditional finance, and different regions have adopted sharply contrasting approaches.

In crypto asset markets, confidence is a big factor. Many tokenised markets remain illiquid5, with limited secondary trading and heavy reliance on trust in platforms, issuers and technology providers. “When you buy a crypto asset, you’re not buying anything physical,” explains George Morris. “It’s all about confidence in the technology.”

“Crypto is a global industry, but we’re still seeing more competition than convergence between countries,” reflects George. “The regulatory choices made over the next year will have a lasting impact on where capital and innovation settle.”

In the US., a permissive, pro-business stance has encouraged rapid experimentation, embedding crypto deeper into the financial mainstream. Large US-based firms dominate institutional crypto custody and trading volumes6, benefitting from a regulatory environment that tolerates measured risk, though enforcement actions around unregistered securities remind the market of the boundaries.

Europe, by contrast, has taken a more cautious path. MiCA, the EU’s comprehensive crypto regulation7, took three to four years from initial proposal to enforcement – and significant parts of the ecosystem, including DeFi and crypto lending, remain largely unregulated. These regulatory gaps make it difficult for authorities to stay ahead of market innovation.

“There’s been a tendency in the EU to assume all crypto activity is nefarious, partly because it was often associated with scams,” explains George. “But now that so much of the activity is being conducted by large, regulated entities like banks and asset managers, regulators have to take more decisive action.”

The UK sits somewhere in between these two approaches. Its regulatory framework is still under development, which offers a potential “second-mover advantage”. By observing MiCA’s successes and shortcomings, UK authorities can craft rules that anticipate market innovation and avoid pitfalls before rolling them out.

Integrating into the full regulatory perimeter is a major adjustment for all market participants. Historically, crypto firms faced mainly anti-money-laundering obligations. Today, they must navigate licensing, disclosure frameworks and operational requirements akin to traditional banks. Meanwhile, traditional financial institutions face the challenge of absorbing these changes while maintaining focus on core operations.

Legal expertise is central to the success of this transition. “Our teams are helping regulators understand what we see day to day, through regulatory education, policy consultation and client engagement,” explains George. “This is critical to shaping a more informed, effective regulatory environment.”

“Crypto is a global industry, but we’re still seeing more competition than convergence between countries.”

George Morris - Partner →

“We take a highly bespoke approach to structuring niche investment strategies.”

Sabrina Schwiebert - Partner →

“Our clients are investing in or developing dual-application technologies in response to the current geopolitical situation.”

Frances Doherty - Partner →

Investment landscape

These innovations mean that deals no longer fit into neat siloes. Research shows a “great convergence” is taking place between traditional and alternative investing8, with public and private strategies increasingly overlapping and driving partnerships across asset types. A 2025 study shows that more than 80% of institutional allocators are keen to consider multi-asset solutions that combine several private alternative assets9.

This convergence is driving a shift towards more tailored, integrated structuring solutions. “We take a highly bespoke approach to structuring niche investment strategies,” explains Sabrina Schwiebert. “That means bringing together the right mix of expertise for each client, so we can fully capture the technical nuances and deliver exactly what’s needed.”

This trend mirrors a desire amongst private capital investors to invest in dual‑use technologies that blur traditional sector boundaries.

For example, current geopolitical instability has led to an investment boom in technologies relevant to national and economic security. Many European nations have significantly increased their defence budgets and the nature of modern security challenges has meant that those budgets are increasingly expended on advanced technology. Particularly prevalent are drone, cyber security and satellite technologies. These technologies often have dual‑use capabilities which have applications for civilian use. The current geopolitical upheaval is also leading to a significant uptick in investments in technologies for food security and alternative power generation, like hydrogen or nuclear fusion.

“Our clients are investing in or developing dual‑application technologies in response to the current geopolitical situation,” reflects Frances Doherty. “Often, it’s an AI product or quantum computing product, but it has potential national security or critical‑infrastructure applications. So, we work with our specialist colleagues, relying on their focus in areas like IP, regulatory compliance and competition.”

Firms increasingly need lawyers who can connect the dots across multiple domains, anticipate regulatory and commercial friction points and shape solutions that are legally sound, commercially viable and technologically informed.

A new era of alternative financing

The convergence of private credit, tokenisation and cross-sector collaboration is creating opportunities that simply didn’t exist a decade ago. Yet the path forward is neither linear nor predictable: success will demand balancing innovation with regulation, technical expertise with commercial pragmatism, and speed with governance.

“We’re witnessing an ongoing shift in how financing solutions are structured and delivered,” comments Amer. “The winners will be those who can spot opportunities, foster relationships, navigate complexity, remain nimble, and harness innovation.”

Building on this transformation, one area seeing significant activity, and exemplifying the benefits of cross-sector collaboration, is fund finance, a specialised form of lending that has become essential infrastructure for the modern investment landscape.

“As funds across asset classes and sectors grow in scale and sophistication, fund finance has evolved in parallel,” explains Jen Yee Chan. “Hybrid facilities combining subscription lines and NAV features, term tranche capital call facilities, securitisation fund finance, and GP and co-invest facilities have become part of a fund manager’s toolbox. In this sense, fund finance does not merely support the funding of the future; it actively enables it, providing the liquidity and structural agility that allow capital to flow where it is needed most.”

By providing this foundational infrastructure, fund finance illustrates the kind of agile, cross-disciplinary approach that will define success in the modern funding landscape.

The firms, investors and advisors that thrive will be those willing to experiment, learn continuously and act as bridges between disciplines, geographies and technologies. The question is no longer whether these changes will come; it’s whether market participants are prepared to seize the opportunities they bring.

“Fund finance does not merely support the funding of the future; it actively enables it, providing the liquidity and structural agility that allow capital to flow where it is needed most.”

Jen Yee Chan - Partner →

Key takeaways

  • Funding is becoming more flexible, but also more complex.
  • Private credit and bank partnerships are reshaping deal structures.
  • Tokenisation is moving from theory to infrastructure.
  • Regulation will remain fragmented globally – planning for divergence is essential.
  • The biggest opportunities are where sectors intersect.

Whether you are raising capital, allocating it, or rethinking how it’s structured, our team is ready to help you navigate the shift towards private credit, tokenisation and a more interconnected funding landscape.

Opportunity squared:

Compare the most dynamic areas for growth and collaboration at the intersection of sectors. Assess the most promising dimensions for strategic expansion and partnership.

Explore →

Powering the AI era

Planning, power and people

Horizon scanning

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Financial Institutions

Healthcare and Life Sciences

Technology, Media and Telecommunications

Energy, Natural Resources, Infrastructure and Construction

Footnotes

[1] https://www.ynharari.com/book/sapiens/

[2] https://www.aima.org/article/press-release-strong-growth-sees-private-credit-market-reach-us-3-5-trillion.html

[3] https://www.spglobal.com/market-intelligence/en/news-insights/research/2025/11/spglobal-market-intelligence-report-reveals-private-credit-disruption-and-impact-on-credit-quality-in-the-banking-landscape

[4] https://phemex.com/blogs/phemex-rwa-weekly-tokenized-assets-35b-october-31-2025

[5] https://finance.yahoo.com/news/european-regulator-says-tokenised-stocks-160254289.html

[6] https://cryptorank.io/news/feed/848d3-us-firms-dominate-corporate-crypto-treasuries

[7] https://finance.ec.europa.eu/digital-finance/crypto-assets_en

[8] https://www.mckinsey.com/industries/financial-services/our-insights/asset-management-2025-the-great-convergence

[9] https://www.institutionalinvestor.com/article/2eerft7k3x3uddbhw5on4/innovation/the-path-to-private-markets

© Simmons & Simmons LLP and its licensors. All rights asserted and reserved. This document is for general guidance only. It does not contain definitive advice. Simmons & Simmons LLP is a limited liability partnership registered in England & Wales with number OC352713 and with its registered office at CityPoint, One Ropemaker Street, London EC2Y 9SS, United Kingdom. It is authorised and regulated by the Solicitors Regulation Authority and its SRA ID number is 533587. The word “partner” refers to a member of Simmons & Simmons LLP or one of its affiliates, or an employee or consultant with equivalent standing and qualifications. A list of members and other partners together with their professional qualifications is available for inspection at the above address.