ADDX, licensed by the Monetary Authority of Singapore (MAS) to facilitate the issuance and trading of digital securities, will list a private equity fund of funds on its marketplace. ADDX has partnered with Fullerton Fund Management, an Asia-based investment specialist, to offer the Fullerton Optimised Alpha Fund – a closed-end fund targeting 8% to 12% in returns per annum over its fund life of seven years. Fullerton is a subsidiary of Temasak, the state-managed investment fund.
According to a statement by ADDX, the fund will be invested in a portfolio of six to eight private equity and private credit funds. The assets of the fund will be diversified by geography, including 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.
The offer is open to accredited investors at a minimum amount of $10,000. ADDX states that this amount is in contrast to the traditional, non-tokenized process that would require a $250,000 minimum investment. Tokenization enables ADDX to reduce manual work and streamline the entire process.
A liquidity option in the form of quarterly gated redemptions is available to investors.
Oi-Yee Choo, ADDX CEO explained that globally, private equity has outperformed public equity:
“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. By bringing down the barrier to entry, ADDX is contributing to a fair and level playing field for individual investors. At a time when rising inflation is a source of anxiety worldwide, strategies that help investors to better preserve and grow their wealth are needed more than ever.
Fullerton Chief Business Development Officer Mark Yuen called the partnership unique:
“By leveraging the ADDX platform, we can provide wider access to our private market expertise. Our private equity team has on average 21 years of experience, and a deep understanding of markets with strong risk management in place to ensure that we can deliver the best outcomes for our investors. 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.”
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