Singapore Stock Exchange-backed private market platform ADDX has announced that Oi-Yee Choo will be appointed chief executive, subject to approval by the Monetary Authority of Singapore (MAS).
The ADDX platform was founded in 2017 and began full trading operations in 2020 after becoming one of the first digital stock exchanges to graduate from the MAS Fintech Regulatory Sandbox. Leading the company into its next phase of growth, Ms. Choo predicts that the ADDX platform will see $1 billion in trades by 2023, cementing its position as Asia’s largest private market exchange.
“Achieving critical mass will indicate that we are the primary meeting place for any issuer or investor looking to trade private markets investments. This will strengthen our ability to achieve our mission of ensuring fair and equal access to private markets for all – including, ultimately, retail investors,” she said.
“The end game is a much better world than the one we live in – truly diversified portfolios not just for sovereign wealth funds and pension funds, but for everyone on the street. Barriers to capital flows will be significantly reduced, allowing funds to reach the most worthwhile projects, generating innovation, economic growth, jobs and government revenue.
Ms Choo joined the firm as Chief Commercial Officer in January 2020, leaving UBS, where she was Head of Investment Banking for Singapore. MAS approval is sought for ADDX Pte Ltd, a newly created entity which Ms Choo will lead as CEO, to operate the ADDX platform. ADDX Pte Ltd is wholly owned by parent company ICHX Tech, which will continue to operate the ADDX platform under existing licenses until new MAS approvals are obtained for ADDX Pte Ltd. Following Ms. Choo’s appointment, Mr. Danny Toe, who served as the head of the ADDX platform through ICHX Tech, will remain CEO of ICHX Tech. With over 20 years of capital markets experience at banks – including Morgan Stanley, Nomura and Citigroup – Ms. Choo has worked on notable M&A and IPO transactions including the listing of Suntec REIT and Parkway Life REIT on the Singapore Stock Exchange (SGX).
Other new appointments include Darius Liu and Inmoo Hwang. Mr. Liu, who was Chief Operating Officer, is now Group Chief Strategy Officer of ICHX Tech. Mr. Hwang, who was previously responsible for business strategy and growth, will take over as COO of ADDX Pte Ltd. The company expects its permanent workforce to grow to 120 this year, up from 90 at the end of 2021.
Total transactions on the ADDX platform exceeded US$150 million in 2021, and the lion’s share came from accredited individual investors from 27 countries spanning Asia-Pacific, Europe and the Americas (excluding the United States). The pace of expansion is expected to accelerate further in 2022 and 2023, with the imminent launch of institutional and corporate investor accounts, and individual account openings now growing at a rate of 120% per year. By 2023, the total number of transactions concluded on the ADDX platform is expected to increase at least four times to reach 100, compared to 24 transactions concluded at the end of 2021.
“We are building the Amazon of private markets – the first step investors think about when considering alternative investments, because they know they will find a full range of products here with varying risk-reward profiles,” said Ms Choo.
The multi-asset exchange has integrated funds, bonds and stocks. Asset classes represented by products on the platform include private equity and venture capital, private debt, real estate, hedge funds, and crypto funds. The ADDX platform will onboard more global general partners (GPs) this year, having launched deals last year by blue-chip names including Partners Group, UOB, Investcorp, Mapletree, Azalea, SeaTown and CGS-CIMB .
Using blockchain and smart contracts, the ADDX platform automates the manual processes of issuance, custody, distribution and secondary trading of private market products. The efficiency resulting from tokenization allows the platform to split investments from $1 million to $10,000. For issuers, the digital securities exchange provides access to previously untapped pools of capital and reduces both the cost and the minimum threshold of fundraising projects. In January 2021, ICHX Tech, which operates the ADDX platform, announced its US$50 million Series A. The fintech company is backed by the Singapore Stock Exchange (SGX), Temasek subsidiary Heliconia Capital and Japanese state-backed investors JIC Venture Growth Investments (JIC-VGI) and the Development Bank of Japan (DBJ) . Last year, the ADDX platform was named by CB Insights Blockdata company as one of the top nine tokenization platforms in the world – it was the only Asian platform to make the list.
Ms Choo said: “Yields in the public markets are gradually falling. For a traditional 70-30 mix of stocks and government bonds, returns are expected to fall from more than 6% per year for baby boomers to just 2% per year for Gen Z. Large institutional investors see this trend and they have the tools to diversify into private markets, which now represent 20-30% of their portfolios. Not allowing individuals to diversify in the same way is – to put it bluntly – unconscionable. This essentially means that a younger generation of investors should not expect a decent rate of return, implying that they will have to stay in the workforce much longer to meet their retirement needs. ADDX was founded to change that. We refuse to accept the status quo of an uneven playing field, and we intend to partner with regulators and issuers around the world to transform the investment landscape.