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Singapore digital securities platform has tokenized a US real estate fund

ADDX, a digital securities platform sponsored by the Singapore Exchange, and Investcorp, an investment management business, have tokenized a private real estate fund centered on the United States “Sun Belt.”

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Tokens were used to raise a portion of the US$150 million funds, although the amount was not disclosed. The monies were invested in five multi-family complexes in Texas, Arizona, and Georgia, totaling over 2,200 units. The portfolio now has a 95 percent occupancy rate. A condominium is an example of a multi-family complex that serves many households in separate units.

In this case, tokenization, which involves converting partial or full ownership right in an asset into a digitally represented token, reduced the minimum investment ticket to US$20,000, down from the US$500,000 typically required for private real estate funds, according to a joint press statement released by ADDX and Investcorp on Thursday.

This fund is the first product of ADDX and Investcorp’s new cooperation, which aims to promote the usage of digital securities in alternative assets. Investcorp, based in Bahrain, is eager to increase its Asian footprint, having invested about $500 million across the continent in the last 18 months.

Private equity, real estate, credit management, absolute return investments, strategic capital, and infrastructure are among the sectors where the two corporations will collaborate on projects. Investcorp’s vice-president for investor relationship management in Asia, YC Tang, said the alliance will assist provide diversified alternative investment products to “underserved investors” through a secure and efficient platform.

“When we look at how sovereign wealth funds and large pension funds invest, alternative assets make up a significant and growing share of their holdings,” said ADDX’s chief commercial officer Choo Oi Yee.

“For the first time, accredited individual investors can utilize a comparable method because digital assets allow for fractional sizes. The distribution of economic progress is more egalitarian.”

ADDX, originally known as iSTOX, had previously tokenized a portion of Mapletree Investments’ private real estate investment trust.

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