Digital platforms can lower costs associated with real estate investment while improving transparency, according to former JP Morgan banker Raymond Poh in an interview in Singapore today.
Poh, who now serves as chief executive of blockchain-powered SDAX, told the audience at the Mingtiandi Singapore Focus Forum 2022 that the startup lets fund managers and other capital market businesses bring all types of real assets to a bigger pool of investors.
Having taken the helm at the ESR-backed platform more than one year ago, Poh noted that the total value of real assets in the global private market space amounts to $520 trillion, as opposed to roughly $100 trillion in the public markets, with SDAX aiming to use its tech infrastructure to bring the transparency of stock exchanges to the private property universe.
“The problem statement that we’re trying to solve for is getting a lot of those private market assets to a broader base of investors,” Poh said.
Powered by Blockchain
Based in Singapore and regulated by the city-state’s central bank authority, SDAX is a digital assets exchange for tokenisation and trading of asset-backed digital securities. The platform connects institutions and accredited investors to asset owners and provides access to high-value, hard-to-trade assets, using the blockchain to streamline and safeguard transactions.
“With the latest technology of smart contracts on blockchain, we hope to automate a lot of these processes, making it more accessible, cheaper and more transparent when it comes to information on the specific deal,” Poh said. “That will make it a lot easier for investors to come in, find out more about the asset and then be able to decide how much money they want to put into a single investment.”
In the interview, the one-time GE engineer laid out a vision of fintech as a continuum stretching back to the first transatlantic cable in the 1860s (fintech 1.0), moving forward to mainframe computing and the first ATMs in the 1960s (fintech 2.0) and to cryptocurrency on blockchain today (fintech 3.0).
“I see ourselves in this convergence as fintech 3.5,” Poh said. “We’re using the technology that’s available through blockchain and smart contracts, and packaging that together with securities that have been around for 50 years.”
Commitment to ESG
Formed from the merger of Digiassets Exchange Singapore and Minterest Holdings, SDAX counts ESR among its shareholders after the Warburg Pincus-backed industrial specialist took over ARA Asset Management earlier this year. ARA and its co-founder, John Lim, previously held a majority stake in Minterest.
ESR recently appointed SDAX as the sole digital assets platform to give smaller investors access to the fund manager’s first-ever $1.5 billion pan-Asia data centre vehicle, as announced by Poh on MTD TV last month.
The partnership with ESR is a natural fit for SDAX, which shares the Hong Kong-listed group’s commitment to environmental, social and governance principles.
“Either you’re in ESG, or your assets will be discounted in the future,” Poh said Tuesday. “Or your cost of doing business is going to skyrocket. As one of our strategic investors has told me, they will stop doing business with their partners who are not ESG-compliant, simply because the cost of doing business due to carbon taxes is going to get too expensive.”