By Oi-Yee Choo, Chief Commercial Officer of ADDX
The merits of offering our first open-end fund were so strong, one might say it was practically an open-and-shut case.
In Q3 2021, ADDX launched the Partners Group Global SICAV Fund, which was exciting for being both our first private equity fund as well as our first open-end fund. Previous funds on ADDX have been closed-ended, meaning investors had to come on board at the start of the fund and either hold their tokens for the full tenure or trade with other investors but not with the fund manager.
In contrast, an open-end fund like Partners Group allows monthly subscriptions and redemptions directly with the fund manager, based on the latest NAV. Open-end funds are technically more difficult to execute for an investment platform, and I am proud of our product and engineering team for pulling it off.
This paves the way for ADDX to consider a much wider set of funds in the market – the full range, really – when curating products for our investors, which in turn means we can ensure a steadier flow of high-quality deals on our platform.
Another ground-breaking issuance in Q3 was XM Studios, the first equity-linked deal on ADDX. The equity-linked note will be converted into shares if XM Studios completes an IPO before a stipulated date. The luxury collectibles maker for global brands such as Marvel and DC Comics is a home-grown Singapore company, founded as humble shop at Bras Basah Complex.
Why is it significant that such deals reaching a broad base of individual investors are now a viable option for private companies? Because they may well transform the capital markets by blurring the line between the public and private markets. Companies could then stay private for longer and focus on long-term growth, rather than the short-term profits that stock exchanges will require.
Two more firsts happened in Q3: Our first private credit fund and our first structured product.
The Temasek-owned SeaTown is an experienced investor with an extensive deal sourcing network that allows it to be highly-selective about which private credit deals to go for. What is exceptional about this deal is that the minimum investment size was reduced by 250 times – from US$5 million to US$20,000.
The Switzerland-based Vontobel is a world-class manufacturer of structured products, with over CHF 290 billion in client assets under management. The equity-linked structured note by Vontobel will be the first of many structured products we offer on ADDX. Based on our estimates, the efficiencies from tokenisation help increase a yield of structured products by as much as 1 to 2 percentage points.
The reason these firsts are important to ADDX is that they represent significant steps toward achieving our goal of helping investors build diversified portfolios with a relatively low correlation across assets. This can only happen if investors continue to see a good variety of opportunities on our platform, from month to month and from quarter to quarter.
As these deals were being rolled out on the platform, ADDX was thrilled to learn that our partner ICH Asset Management had secured a US$200 million QDLP allocation in China, which will allow ADDX to help domestic Chinese investors take on offshore assets more easily.
With a larger base of investors, ADDX will be able to scale and do more. Today, our investors come from 27 countries spanning Asia Pacific, Europe and the Americas (except the US), and their ranks are growing by more than 10% month on month.
Yet, the journey is just beginning. More exciting developments await us in Q4, and in 2022.
ADDX is your entry to private market investing. It is a proprietary platform that lets you invest from USD 10,000 in unicorns, pre-IPO companies, hedge funds, and other opportunities that traditionally require millions or more to enter. ADDX is regulated by the Monetary Authority of Singapore (MAS) and is open to all non-US accredited and institutional investors.