The group has completed a multi-million deal linked to a quota for Chinese offshore investments, opening up potentially major growth in the world's second-largest economy.

Digital securities exchange ADDX, backed by Singapore’s SGX exchange, today said that it expects its business in China to grow rapidly after concluding a $200-million agreement tied to a government-granted quota for Chinese offshore investments.

The Qualified Domestic Limited Partnership scheme, or QDLP, allows domestic investors across China to buy into renminbi funds that focus on overseas investment opportunities. Fund quotas are allocated through major cities such as Beijing, Shanghai, Shenzhen and Chongqing.

ADDX, formerly known as iSTOX, said in a statement today that it has agreed with the Singapore-regulated wealth and fund management company ICHAM, which has received a $200-million allocation as part of the Chongqing government’s overall $5-billion QDLP quota. ADDX will be the primary venue for investments from the ICHAM fund in China authorised to raise capital from Chinese institutions and individuals. 

The statement said that ADDX will offer Chinese investors access to private market products issued in the form of digital securities covering a broad range of asset types, including pre-IPO equity, hedge funds, VC funds, real estate funds, wholesale bonds and structured products. 

The ADDX-ICHAM partnership was among the first batch of two QDLP quota recipients announced by the Chongqing government last month. ICHAM is also the first Singapore company to secure a QDLP allocation in any Chinese city. ADDX and ICHAM were both founded by ADDX chief executive Danny Toe, the statement continued. 

Regulated by the Monetary Authority of Singapore, ADDX currently serves accredited investors from 27 countries, spanning Asia-Pacific, Europe and the Americas (excluding the US). 

“The opening up of official channels like QDLP to allow Chinese investors to diversify their portfolios globally has been taking place gradually and steadily since the 2000s. Amid rising asset prices within China, this move by the Chinese authorities is a prudent one that empowers Chinese institutions and high net worth individuals to participate in high-quality opportunities wherever they are, before bringing their returns back into the Chinese economy to the benefit of local businesses and households,” Oi Yee Choo, chief commercial officer of ADDX, said.

“For international companies that manage or facilitate these investments, including ADDX, China represents a massive opportunity. We are only in the early days of this burgeoning flow of capital between China and the rest of the world,” Choo added.

QDLP was launched in China in 2012.