ADDX will allow tokenised access to the Fullerton Optimised Alpha Fund, which is a closed-end fund targeting 8% to 12% in returns a year over its life of seven years.
The managers invest in a portfolio of six to eight private equity and private credit funds, selected from a field of 20,000 funds, with a focus on blue-chip managers with a proven track record of consistent investment strategy and performance across market cycles.
The underlying assets of the fund will be diversified by geography, across North America, Europe and Asia, and by strategy, across buyout, growth, secondaries and private or distressed credit. The fund will focus on thematic sectors, such as defensive, tech-enabled, new economy, post-Covid-19 dislocation and recovery as well as ESG-aligned sectors.
Fullerton manages assets across public and private markets for a wide range of clients including government entities, sovereign wealth funds, pension plans, insurance companies, private wealth and retail clients. Incorporated in 2003, Fullerton is headquartered in Singapore, and is part of a multi-asset management group, Seviora, a holding company established by Temasek.
As a result of efficiencies from tokenisation, accredited individual investors on ADDX are able to access the Fullerton fund at a minimum size of $10,000, instead of the $250,000 required through traditional, non-tokenised channels. A liquidity option in the form of quarterly gated redemptions is also available to investors.
“Adding a private equity allocation to one’s portfolio has been demonstrated to enhance overall returns while reducing volatility. This is why institutional investors like pension funds typically have 20% to 30% of their capital in the private markets,” said ADDX CEO Oi-Yee Choo
“By bringing down the barrier to entry, ADDX is contributing to a fair and level playing field for individual investors,” she said.
Tokenisation is the digitisation of an asset, in this case a traditional security, using blockchain and smart contract technology. By reducing the need for intermediaries and manual work, tokenisation should make it easier to administer the security, with benefits seen across different stages of its life cycle, including issuance, distribution and custody.
“By leveraging the ADDX platform, we can provide wider access to our private market expertise. Through ADDX we can reach a broader base of investors to help them achieve well-diversified portfolios that can match their long-term investment objectives,” said Fullerton chief business development officer Mark Yuen
ADDX was licensed by the Monetary Authority of Singapore (MAS) as a private market exchange in February 2020. Since then has listed 30 deals on its platform asset classes available on include private equity, venture capital, private credit, real estate, hedge funds, funds with cryptocurrency exposure, and structured products. Its shareholders include Singapore Exchange (SGX), Temasek subsidiary Heliconia Capital and Japanese investors JIC Venture Growth Investments, the Development Bank of Japan, Tokai Tokyo Financial Holdings, Korea’s Hanwha Asset Management, and Thailand’s Kiatnakin Phatra Financial Group.