Temasek-backed ADDX to offer private market plays to wealth managers

A market-trading screen with charts. Photo by Wance Paleri on UnsplashA market-trading screen with charts. Photo by Wance Paleri on Unsplash

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Temasek-backed digital securities exchange ADDX has launched a new service to allow wealth managers to trade private investments.

ADDX, a digital securities exchange with backing from Singapore state-owned investment company Temasek Holdings and Singapore Exchange (SGX), is introducing a new institutional service for wealth managers to access private market products via fractionalization, the company said in a press release.

The exchange will use blockchain and smart contracts to fractionalize its securities to a minimum investment of US$10,000 from the US$250,000 to US$5 million usually needed when accessing private market plays directly from the issuer, the release said. ADDX lowers costs by automating manual processes.

Targeting Family Offices and Wealth Managers

The new institutional product, called ADDX Advantage, will be available to wealth managers, and corporate treasuries and family offices can also use the corporate version of the service, ADDX said, adding brokerages, private banks, external asset managers and multi-family offices will also be targeted. End-clients may be individual accredited investors or corporate investors, ADDX said.  Wealth managers can both make trades and fund transfers on behalf of end-investors, or create sub-accounts for end-clients to manage on their own, ADDX said. Investors will be able to access deals across multiple asset types, the release said.

Brokerage CGS-CIMB and StashAway, a fintech digital wealth manager based in Southeast Asia, have already stepped up as partners for the product, ADDX said.

Oi-Yee Choo, ADDX’s CEO, said addressing the “pain points” for corporate investors and family offices to access private markets will expand and diversify the exchange’s investor base.

Attracting More Issuers

“This will better equip us to attract high-quality issuers to list on ADDX, knowing there will be sufficient investor demand. As an exchange, our goal is to ensure a critical mass of both issuers and investors at the table, so that capital can find worthwhile investment projects, and vice versa,” she said in the statement.

Currently, ADDX’s platform offers assets in private equity, venture capital, private debt, real estate, hedge funds, cryptocurrency funds and structured products.

Temasek Backing

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 Singapore state-owned investment company Temasek Holdings, 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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