SGX-backed private markets platform ADDX to tokenize Hamilton Lane fund

SGX building on Shenton Way in SingaporeSGX building on Shenton Way in Singapore

Private markets platform ADDX will tokenize shares of a private assets fund from Hamilton Lane.

ADDX, which is backed by Singapore Exchange (SGX) and Singapore state-owned investment company Temasek Holdings, will tie up with U.S.-based private markets player Hamilton Lane to tokenize shares of the Hamilton Lane Global Private Assets Fund (GPA) to spur greater access to private markets for a broader range of investors in Asia, the companies said in a press release Wednesday.

The fund will be available to investors on ADDX with a minimum ticket size of US$10,000, compared with a US$125,000 minimum for subscriptions via traditional distribution channels, the release said. The tie-up is the first time Hamilton Lane has tokenized a fund, the release said.

Broader Investor Set

“Hamilton Lane is dedicated to providing access to the private markets for a broader set of investors, and to doing so without some of the headaches that have historically been challenging for smaller investors,” Juan Delgado-Moreira, vice chairman and head of international at Hamilton Lane, said in the statement. “We seek to partner with firms that deliver transformative technology designed to drive our industry forward, and are excited to offer our investors access to GPA through this new platform.”

The GPA Fund, launched in May 2019, has posted 16.11 percent net annualized returns since inception, with assets of more than US$1.85 billion as of end-January, the release said. The open-ended fund’s assets are mainly direct equity and secondary investments as well as direct credit, with around half of its deals in the information technology and industrials sectors, the release said. Other sector exposure includes healthcare, energy and communications, the release said.

ADDX, which bills itself as Asia’s largest private market exchange, said more than half the investors on its platform are from Asia, with others from Europe and the Americas ex-U.S. The exchange’s platform automates processes for issuance, custody and distribution for private market products, using blockchain and smart-contract technology, the release said.

Using Tokenization

Oi-Yee Choo, CEO of ADDX, noted that private markets were much larger than public markets, with more than 90 percent of companies with annual revenue of US$100 million or more still private.

“For any investor, leaving private equity out of your portfolio essentially means turning one’s back on the vast majority of investment opportunities in the market,” she said in the statement. “We know the value private equity can bring to investors’ portfolios. The only missing link thus far has been the lack of access to such assets for most individual investors. With tokenization and fractionalization, ADDX is committed to plugging that gap.”

Since being licensed by the Monetary Authority of Singapore (MAS) as a private market exchange in early 2020, ADDX has listed 26 deals on the platform, the release said. The deals have included Investcorp, UOB, CGS-CIMB and entities owned by Temasek, such as Mapletree, Azalea and SeaTown.

ADDX hosts asset classes including private equity, venture capital, private debt, real estate, hedge funds, cryptocurrency-exposed funds and structured products, the release said.

The exchange, which is owned and operated by ICHX Tech, raised US$50 million in a series A round at the beginning of 2021. Its investors include SGX, Temasek subsidiary Heliconia Capital, and Japanese investors JIC Venture Growth Investments (JIC-VGI) and the Development Bank of Japan (DBJ). Other shareholders include South Korea’s Hanwha Asset Management, Japan’s Tokai Tokyo Financial Holdings and Thailand’s Kiatnakin Phatra Financial Group.

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