In a time where exchanges are getting razed to the ground as swiftly as they are cropping up, Singapore-based private market exchange ADDX is gaining a foothold in the industry: a MAS-regulated platform that uses blockchain and smart contract technology to digitise securities, it is the first financial institution here to recognise cryptocurrency assets for the purpose of onboarding accredited investors. Notable shareholders include Singapore Exchange, Temasek subsidiary Heliconia Capital, Stock Exchange of Thailand and United Overseas Bank.
At the helm is CEO Oi-Yee Choo, who has over 20 years of experience in investment banking and previously held senior roles at UBS, Morgan Stanley and Nomura Holdings. The 49-year-old transitioned from traditional banking to fintech after observing two trends and becoming convinced that capital markets are ripe for transformation.
“First, capital is shifting from public to private markets. The stock markets are increasingly dominated by high-speed, algorithmic trading programmes. Returns are declining. The institutional investors can see this happening, which is partly why they’ve raised their portfolio allocations to private market investments to 20 percent or higher,” she explains.
“Then, there is the emergence of blockchain technology. Cryptocurrencies were among the earliest applications of blockchain, but today, many non-crypto applications exist, from tokenised securities to cross-border payments. In the case of private markets, tokenised securities can make investments much more efficient to administer, which in turn makes fractionalisation possible.”
What does this mean for investors? The democratisation of private market investing. While private markets are more lucrative than public markets, there has always been a high barrier to entry because the technology to serve a large number of investors was too costly: with minimum investment sizes at $1 million or more, it was exclusive to the wealthiest investors—billionaires, pension funds, sovereign wealth funds and the like.
But blockchain technology solves the inefficiencies in the infrastructure in a relatively cost-effective way, so private market minimum sizes can now be reduced to as low as US$5,000.
“It levels the playing field for individual investors by allowing them to build a diversified portfolio, not just across stocks and bonds, but also across both public and private markets. This improves the resilience and long-term returns of their wealth holdings.”
Oi-Yee Choo on ADDX’s rapid success
And it is an undertaking she is earnest about advancing because of her own experience: “When I was an investment banker, I worked on high-quality deals, but when those deals were ready to be invested in, they were mainly offered to institutional investors. Individuals like me did not get access even if we had a quite sophisticated understanding of the investments.”
ADDX has plans to onboard 10 new wealth managers such as private banks, brokerages and external asset managers as part of a service to cater to institutions. Last year, securities brokerage CGS-CIMB Singapore was the first to be onboarded and now distributes to its high-net-worth clients a full suite of deals on the platform including private equity, private credit, venture capital and hedge funds.
Although the platform only became fully commercially operational in 2020, it is on track to hitting US$1 billion in transactions by the end of the year. But it has been no cakewalk and Choo had her work cut out for her during the market’s downturn last year.
“One of my biggest challenges was dealing with the commercial aspect of the business, like navigating the macro and fundraising environment. I had to help the company strike a balance between conserving capital and continuing to build the business so that when the market comes back up, we would have in place the capability, processes and products to seize opportunities,” she lets on.
“The second challenge was talent retention and keeping the team motivated. For a large traditional bank, the solution might be money, but research has shown that talented people also need more—they need an intrinsic motivation to give their best at work each day. So, we set out to develop a healthy company culture and opportunities for personal development and growth.”
And her respect for her talent pool is resolute, so she not only finds it imperative to help them find purpose, but also agency.
“I’ve learnt the importance of hiring people who are smarter than me and giving them ample resources and space to carry out their jobs. I’ve never been a fan of micromanaging employees; I believe in keeping people accountable based on key performance indicators and empowering them to deal independently with roadblocks that may get in the way,” she says.
As one who knows a thing or two about making bold moves in a careers, Choo’s advice to those looking to do the same is to only roll the dice if it’s something you believe in.
“I took a leap of faith when I left a comfortable environment to join ADDX. I would say consider the move seriously, calculate the risks and make an informed decision. Only take the step forward if your head and heart are saying the same thing.”
Art director: Chia Wei Choong
Videographer: Alicia Chong
Photographer: Mun Kong
Photographer’s assistant: Alfred Phang
Hair: Rick Yang using Keune
Makeup: Aung Apichai using Tom Ford Beauty
