The institutional service will allow wealth managers to sell private market products to their clients on digital securities exchange ADDX. Corporate treasuries and family offices can also take part via a corporate service, according to a statement by ADDX.
ADDX is a capital markets platform with Monetary Authority of Singapore (MAS) licenses for the issuance, custody and secondary trading of digital securities. It is owned and operated by ICHX Tech Pte Ltd. ICHX Tech has been approved by MAS as a recognised market operator (RMO). It also has a capital markets services (CMS) license to deal in securities and collective investment schemes as well as to provide custodial services.
Both services fall under a new product line for businesses, called ADDX Advantage. Among some of the first institutions to come on board as partners include Stashaway, a Southeast Asia digital wealth manager, and CGS-CIMB, a securities brokerage in the region.
Wealth managers using the service can offer their clients fractional access to private market products. The service is designed for brokerages, private banks, external asset managers and multi-family offices. Through a B2B2C model, it ultimately targets wealth managers’ end-clients, who may be individual accredited investors (or corporate investors.
Currently, wealth managers looking to offer private market products to their end-clients typically have to negotiate deals with each issuer separately.
“Being on ADDX means an instant plug-in to a full suite of deals across multiple asset types. The use of blockchain and smart contracts on ADDX also enables the fractionalisation of opportunities down to a minimum of $10,000, from the $250,000 to $5m typically required when going direct to private market issuers,” according to ADDX.
Depending on the regulatory licenses the wealth managers hold, they can choose between two types of institutional services. They can either execute trades and perform fund transfers on behalf of end-investors, or create sub-accounts in their end-clients’ names and allow the clients to take control of their own activity on ADDX.
ADDX’s corporate service operates under a B2B model and is designed for institutional investors, as well as businesses investing their own capital, such as corporate treasuries and family offices. For example, corporate treasuries with excess cash on hand may now benefit from short-term investment instruments that pay a higher return than bank fixed deposits.
“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. In launching private market services for wealth managers and corporate investors, we have made a long stride towards this goal,” said ADDX CEO Oi-Yee Choo.
Established in 2017, asset classes available on the ADDX platform include private equity, venture capital, private debt, real estate, hedge funds, cryptocurrency funds, and structured products. ADDX has listed 26 deals to date, working with names such as Partners Group, UOB, Investcorp, CGS-CIMB, as well as Temasek-owned entities Mapletree, Azalea and SeaTown.
The company raised $50m in its Series A round in January 2021. Its shareholders include Singapore Exchange, Temasek subsidiary Heliconia Capital and Japanese investors JIC Venture Growth Investments and the Development Bank of Japan. Individual accredited investors using the ADDX platform come from 39 countries, spanning Asia Pacific, Europe, and the Americas (excluding the US), according to the company.