Private market exchange ADDX is teaming up with China Construction Bank (CCB) for the custody and distribution of a US$200 million quota allocation under the Qualified Domestic Limited Partnership (QDLP) scheme.
A memorandum of understanding (MOU) signed between the two parties allows ADDX to operationalize the QDLP scheme through a collaboration with CCB’s Chongqing and Singapore branches.
Launched in 2012, the QDLP scheme allows Chinese investors to participate in renminbi funds focused on overseas investment opportunities. Unlike other offshore schemes such as Qualified Domestic Individual Investor (QDII) and Wealth Management Connect programmes, the QDLP allows offshore investments in a greater variety of assets – not just public market products, but also private market ones.
Last year, ADDX reached an agreement with the Singapore-regulated wealth and fund management company ICHAM, which has received a US$200 million allocation as part of the Chongqing government’s overall US$5 billion QDLP quota. Under the agreement, ADDX will be a key venue for investments from the ICHAM fund authorized to raise capital from Chinese institutions and individuals.
ADDX will offer Chinese investors access to private market opportunities issued as digital securities, covering a broad range of asset types including private equity funds, venture capital funds, real estate funds, hedge funds, pre-IPO equity, bonds and structured products.
Under the MOU, CCB could be appointed to act as the custodian bank for the US$200 million in investments made on ADDX through the ICHAM fund. The bank’s Chongqing branch could also distribute to its wealth clients the fund units under the QDLP allocation.
ADDX chief executive officer Oi-Yee Choo says: “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. By allowing domestic capital to buy into high-quality offshore assets, China is ensuring its investors can build globally diversified portfolios that are best positioned to preserve and expand gains from the opening-up of the country’s economy over the past few decades.”