The move will now allow wealth managers to offer their clients fractional access to private market products, where they can better diversify their portfolio away from public markets exposure.
The service is designed for brokerages, private banks, external asset managers and multi-family offices, and ultimately benefits the wealth manager’s end-clients, who may be individual accredited investors or corporate investors.
The service will also help wealth managers save time when they’re looking to offer private market products to their end-clients; previously, wealth managers had to negotiate deals with each issuer separately.
Depending on the regulatory licenses the wealth managers hold, they can choose between two types of institutional services. They can either execute trades and perform fund transfers on behalf of end-investors, or create sub-accounts in their end-clients’ names and allow the clients to take control of their own activity on ADDX.
See also: SmartBiz is first fintech to become bank under Trump administration
Corporate treasuries and family offices can also take part in the space via a corporate service to diversify their portfolios through private market products.
So far, some of the first institutions to come on board as partners include StashAway and CGS-CIMB.
CGS-CIMB Group CEO Carol Fong says, “We believe that investments should be made more affordable to a wider group of investors. This means collaborating with platforms such as ADDX that allow more investors to access previously out-of-reach private investments with fractional ownership. This is a start to ‘democratise’ the private equity market to make it more inclusive.”
See also: Chocolate Finance CEO says disabling of AXS payments was 'communicated poorly'
ADDX CEO Oi-Yee Choo says, “For ADDX, this latest move represents an important strategic pivot that strengthens the competitiveness of our exchange by expanding and diversifying our investor base. This will better equip us to attract high-quality issuers to list on ADDX, knowing there will be sufficient investor demand.”
“As an exchange, our goal is to ensure a critical mass of both issuers and investors at the table, so that capital can find worthwhile investment projects, and vice versa. In launching private market services for wealth managers and corporate investors, we have made a long stride towards this goal,” she adds.
