Posted inAlternatives

ADDX tokenises first private credit fund

The deal reduces the minimum investment size for individual accredited investors.

After being tokenised, the SeaTown Private Credit Feeder Fund’s minimum investment size has been cut to $20,000 from $5m.

“The lowering of the investment threshold was made possible through the issuance of security tokens with an exposure to the fund,” said ADDX in an announcement.

“The move helps diversify the investor base of private credit funds, which have traditionally been designed to serve institutional capital.”

The tokens, also known as digital securities, make use of blockchain and smart contracts to replace manual processes during custody, ownership tracking, fund earnings distribution and secondary trading, explained ADDX.

The use of security tokens also eliminates the need for multiple intermediaries, which brings down costs further for both issuers and investors.

With more than $1bn in committed capital, the fund is managed by Temasek-owned SeaTown.

The fund is expected to make 15-20 investments in senior, junior and mezzanine debt, each with five to 10% of committed capital and typical maturities of two to four years. The fund is expected to close at the end of 2025.

The return and volatility of the fund was not disclosed by ADDX.

The fund’s offering on the ADDX platform was completed last month, with individual accredited investors subscribing to $7m in tokens. The tokens are now listed for secondary trading on the ADDX exchange, which allows other accredited investors to take part.

SeaTown is a Singapore-based investment manager that has been investing in private credit since 2012, with $2.3bn of investment as of 30 June.

Singapore-regulated ADDX is building a private market exchange with blockchain and smart contract technology.

Earlier this month, it listed its first cryptocurrency product, the TCV Digital Asset Fund, on its platform.

ADDX signed an agreement to receive a $200m allocation under China’s QDLP scheme to enlarge its business in China in September.

Part of the Mark Allen Group.