ADDX, a digital securities exchange headquartered in Singapore formerly known iSTOX, has partnered with Investcorp, a Bahrain-based alternative investment management firm to offer a tokenized real estate fund focused on residential properties in the United States, ADDX announced on Thursday.
Fast facts
- Investcorp raised US$150 million for the fund that has invested in five multi-family complexes with over 2,200 units. The complexes were 95% occupied and located in the Sun Belt states of Texas, Arizona and Georgia.
- Real estate tokenization involves creating digital tokens on the blockchain and assigning them to real estate properties. Tokenization allows small investors to own fractionalized interest in real estate, thereby lowering the minimum investment amount and barrier to entry. The minimum investment size via ADDX was reduced from the typicall required US$500,000 for investment in private real estate funds to US$20,000.
- Investcorp’s investments are focussed on private equity, real estate, absolute return investments, infrastructure, credit management, and strategic capital. Investcorp is one of the leading investment managers in the world with assets under management worth US$37.6 billion.
- Founded in 2017, ADDX is fully regulated by the Monetary Authority of Singapore and backed by the Singapore Exchange, Heliconia Capital, a subsidiary of Temasek, and Japan government-backed investors JIC Venture Growth Investments and the Development Bank of Japan. The exchange serves accredited investors from 27 countries across Asia Pacific, Europe and the Americas.
- The real estate fund is the first product of the Investcorp ADDX partnership forged to expand the use of digital securities in alternative assets. The two companies are exploring further joint projects in Investcorp’s focus areas to make more investment opportunities available on ADDX’s platform.
- Oi Yee Choo, chief commercial officer at ADDX, told Forkast.News: “We see that there is general Asian demand for global real estate. U.S. multi-family is an asset class that is stable and growing. But there is currently limited access to this asset class.” The targeted Sun Belt States in the U.S. are experiencing “healthy economic and population growth,” and it fits in with ADDX’s aim of offering diversification across markets, she added. “ADDX aims to give investors the freedom to choose from a wide variety of assets. This helps them build portfolios that consist of relatively uncorrelated investments, diversified by asset class, geography and risk-reward profile, among other factors.”