New ADDX CEO: ‘Unconscionable’ little guys shut out of private markets

A Singapore-based, blockchain-powered private market platform has a new leader — an ambitious new female chief executive who wants to open up private markets to retail investors.

Investment banking veteran Oi-Yee Choo, who is set to be promoted to CEO of ADDX if the Monetary Authority of Singapore approves, says she wants to work with regulators to democratise access to investment opportunities currently denied to the middle class.

The public markets are on a gradual decline, says Choo, and large institutional investors see this trend and are allocating as much as 20 to 30 per cent of their portfolio into private markets (an umbrella term that includes private debt, private equity, hedge funds and real estate).

“Not allowing individuals to diversify in the same way is – to put it bluntly – unconscionable,” Choo said.

“It is essentially saying a younger generation of investors shouldn’t expect a decent rate of return, which implies 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 a status quo of an uneven playing field, and we intend to partner with regulators and issuers everywhere to transform the investing landscape.”

ADDX’s growth trajectory

Founded in 2017 and in full commercial operations since 2020, the SGX-backed platform uses a permissioned version of Ethereum to reduce costs and minimum thresholds for projects.

There’s typically a minimum investment of US$10,000 on ADDX, rather than the US$1 million minimum usually required in private market deals.

But currently, the regulated platform is only accessible to accredited investors, meaning people with a net worth of over SGD$2million (US$1.5 million) or an income of over SGD$300,000 (US220,000).

Private equity, venture capital, private debt, real estate, hedge funds and crypto funds have all used the platform to raise funds, with 24 deals completed on ADDX at the end of last year. Blue-chip names such as Partners Group, UOB, Investcorp and Mapletree were represented, as well

ADDX is forecasting that that number will hit 100 by the end of 2023, with total transactions set to rise to US$1 billion, from $150 million at the end of last year.

“Reaching a critical mass will signal that we are the primary venue for any issuer or investor looking to deal in private market investments,” Choo said.

“It will strengthen our ability to achieve our mission of ensuring fair and equal access to the private markets for – including, ultimately, retail investors.

“The end game is a much better world than the one we live in – truly diversified portfolios not just for sovereign wealth funds and pensions funds, but every person on the street.

“Barriers to capital flows will be reduced significantly, allowing funds to reach the worthiest projects. This generates innovation, economic growth, jobs and government revenue.

“We are building the Amazon of the private markets – the first stop investors think of when considering alternative investments, because they know they will find here a full range of products with varying risk-reward profile.”

Investment banking veteran

Choo joined ADDX as the chief commercial officer in January 2020, moving from UBS, where she was head of investment banking for Singapore.

She has more than two decades of capital markets experience, including Morgan Stanley, Nomura and Citigroup.

Her experience includes the listing of two real estate trusts, Suntec REIT and Parkway Life REIT, on the SGX.

ADDX is estimating that its permanent headcount will rise to 120 this year, from 90 at the end of 2021.