Singapore-based private market exchange ADDX tokenized a private credit fund by SeaTown, owned by Temasek, reducing the fund’s minimum investment size from $ 5 million to $ 20,000.
The exchange said it was the first private fund to be tokenized on its platform and that this latest development has broadened the universe of potential investors to private credit.
“It is not possible for an investor with a net worth between $ 2 million and $ 20 million to enter a private loan fund with a minimum ticket size of $ 5 million. But with a minimum of $ 20,000, that same investor can participate in this previously inaccessible asset and benefit from enhanced portfolio diversification, ”Oi Yee Choo, ADDX chief commercial officer, said in a statement.
Indirectly owned by Temasek
ADDX stated that SeaTown Private Credit Feeder Fund LP is a four year closed fund focused on providing private credit to companies in the Asia Pacific region.
Fund manager SeaTown is indirectly owned by Singaporean investment firm Temasek Holdings. It manages five funds with total assets under management of $ 6 billion as of June 30.
“In the aftermath of the Great Financial Crisis of 2008, the growth of private credit funds accelerated in part because traditional lenders such as banks took a more conservative stance on lending. In the midst of this expansion, we can see the private credit fund space maturing and attracting a large pool of professional talent, ”Choo said.
Disrupting the multi-billion dollar bond market
Earlier this month, Choo told Capital.com that the possibilities of splitting offered by blockchain-powered token technology are expected to disrupt the global bond market.
“ADDX sees the bond market as increasingly disruptive with digitization because it is so inefficient today. The minimum size you collect through a bond is around $ 250 million. And for a lot of small businesses, it’s too big and too expensive, ”Choo told Capital.com.
On Monday, ADDX said lowering the minimum investment size for its first tokenized private credit fund will help diversify the investor base of private credit funds, which have traditionally been designed to serve institutional capital.
Read more: Token technology to disrupt the $ 128 billion global bond market
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