Singapore’s recent move to liberalize the private equity markets is expected to benefit both businesses and investors through enabling access in a controlled, blockchain-based environment.
1X, Singapore’s first and only licensed and regulated private securities exchange saw its first-ever earlier this month in Aggregate Asset Management, a boutique fund manager. In addition to the unique enablement of access, it is also the world’s first regulated private securities exchange built on a public blockchain, an Ethereum main net, increasing liquidity.
Regulator support
«Allocating investments in private markets is becoming more common and necessary, in order to create a well-diversified portfolio aiming for decent returns,» noted Ravi Menon, MAS managing director, in a recent keynote speech.
Shifting market dynamics in recent years have favored private equity and the inclusion of the asset class in selective markets has proven to generate stronger risk-adjusted returns, mitigating many downturns in public markets.
In addition to public support and licensing, MAS is directly bolstering the market through commitments of $5 billion to private markets.
Not only a retail benefit
At $5 million, the minimum ticket size for most PE investments is a high barrier of entry for the masses. One of 1X’s major advantage is enabling greater access and by fractionalizing shares, a greater number of investors will be able to gain exposure at smaller ticket sizes.
But the new advantages are not limited to retail investors.
One of the major hurdles for private market investors is the long-time horizon required with most investments requiring a lock-up period of more than five years, whereas 1X enables greater liquidity through tradable securities.
«This provides [investors] greater and easier access to private equity while addressing some of its traditional risks of this that this asset class,» the firm said in a recent release
