Key Takeaways
- The blockchain-based private market exchange ADDX has paired up with China Construction Bank to enable Chinese domestic investors to invest offshore.
- The two firms will pool their resources to invest $ 200 million in a Qualified Domestic Limited Partnership (QDLP) framework that enables experienced investors the opportunity to invest in funds focused on foreign investment.
- This scheme allows for investments in both the public and private sectors.
In order to facilitate domestic Chinese investors’ participation in the government-run offshore investment programme, China Construction Bank (Chongqing and Singapore branches) and ADDX have formed a partnership.
Qualified Domestic Limited Partnership, or QDLP, is a programme that enables knowledgeable investors to participate in yuan-based funds with an emphasis on foreign assets, including in both public and private markets.
A memorandum of understanding (MOU) between the two financial firms lays the groundwork for their collaboration in the custody and distribution of a $200 million quota allocation under the QDLP scheme.
China is working to ensure its venture capitalists can create diversified multinational portfolios that are best positioned to preserve and increase gains from the country’s economic entrance over the past few decades by permitting domestic capital to invest in high-quality offshore assets, according to ADDX CEO Oi-Yee Choo.
“As Asia’s largest private market exchange, ADDX is eager to bring the global investment opportunities on our platform to China, Asia’s largest wealth management market.”
The agreement follows one made between ADDX and wealth- and fund-manager ICHAM last year. According to the press release, ICHAM garnered the 200 million US dollar allocation as part of the Chongqing government’s overall 5 billion US dollar quota under QDLP. The exchange will give investors access to private market assets issued as digital securities, including funds for private equity, venture capital, real estate, pre-IPO equity, and other products, according to the press release. As part of that agreement, ADDX will serve as a venue for investments from ICHAM’s China fund.
ADDX, which was founded in 2017 and began operating in 2020, will split private market investment and lower the required minimum investment from $1 million to $10,000 using blockchain and smart contract technology.
The Monetary Authority of Singapore has granted ADDX a licence to issue, hold, and trade digital securities.
In accordance with the MOU, China Construction Bank is authorised to be named the custodian bank for the ICHAM funds and to distribute fund units to its wealthy clients.
One of the “Big Four” banks in the nation, China Construction Bank is one of the most valued banks in the world with a market capitalization of $175 billion.
