UK asset management firm Schroders has partnered Singapore-based private market exchange ADDX to launch a semi-liquid global private equity strategy to tap accredited individual investors.
The strategy is focused on the lower mid-market segment, where the market inefficiencies will enable the Schroders Capital private equity investment team to tap a larger opportunity set with attractive entry prices, Schroders said in a statement.
This approach also brings transformational growth opportunities through value creation and low reliance on financial engineering, according to the firm.
The semi-liquid fund has a significant exposure in Europe and the US, eyeing five industry sectors, including healthcare, technology, consumer, business services, and industrials. Even as the allocation to Asia and other geographies is lower, Schroders sees opportunities for growth investments in these markets.
Schroders’s private equity team invests primarily in direct deals, co-investments, and GP-led secondaries, providing high fee efficiencies for the strategy, read the company’s statement.
Szu Yi Chin, Schroders’ Head of Wealth and Product for Asia Pacific, said it has become increasingly important for investors to access non-listed companies with attractive growth potential.
“Small and mid-buyouts significantly enhance a private equity portfolio, offering historical resilience during market disruptions and consistently outperforming larger buyouts with lower reliance on leverage,” she said.
“Their ability to sell to larger private equity firms augments exit options and reduces dependence on IPOs, contributing to risk diversification and potentially greater returns for investors, making them a strategic component of a robust investment strategy,” Chin added.
Schroders Capital managed over $19 billion in private equity investments as of June 2024.
ADDX serves individual accredited investors from 39 countries spanning Asia Pacific, Europe, Middle East, and the Americas (except the US). In 2022, the company launched ADDX Advantage, a new institutional service for wealth managers.
The platform has so far listed investment vehicles from global and Southeast Asian managers such as Partners Group, Hamilton Lane, SeaTown, Innoven Capital, Aura, Helicap, Fullerton Fund Management, and Investcorp.
ADDX, formerly known as iSTOX, has raised a total of $140 million in funding since its inception in 2017, from investors including Singapore Exchange (SGX), the Stock Exchange of Thailand, Temasek subsidiary Heliconia Capital, the Development Bank of Japan, UOB, Hamilton Lane, Tokai Tokyo Financial Holdings and KB Securities, a subsidiary of Korea’s largest banking group KB Financial Group.