ADDX lists private credit fund managed by Helicap Investments

HELICAP Investments has listed its flagship fund – Helicap Fund I – on private markets platform ADDX in a bid to promote financial inclusion in South-east Asia.

Since its launch in 2018, Helicap Fund I has disbursed more than US$100 million in loans and has achieved an annualised net return of around 10 per cent, ADDX said in a press release on Thursday (Jul 28).

The move by Helicap Investments aims to improve financial inclusion for underserved individuals as well as micro, small and medium-sized enterprises in Southeast Asia, the company said. The listing will also empower partner institutions to change the way consumers and SMEs access credit.

With the efficiencies from ADDX’s blockchain and smart contract technology, the fund was offered to approved investors on ADDX’s platform at a minimum size of US$10,000. Investors who subscribe to private credit funds like Helicap through traditional, non-tokenised channels generally require minimum investment sizes of US$250,000 or more.

Choo Oi Yee, chief executive of ADDX, noted that microlending companies are tackling a problem that traditional lenders have not been able to solve because they “haven’t built the granular knowhow and infrastructure for it”

“Microlenders are putting funds in the hands of creditworthy individuals and small businesses, bringing about financial inclusion which translates into more jobs, more people having access to education and higher living standards. Helicap is on a mission to power these microlenders by providing them with lending capital,” she said.

“The company’s mission of improving financial access for underserved customers ties in perfectly with ADDX’s own mission of democratising the private markets. We are therefore excited to list Helicap’s flagship fund.”

Helicap has also developed a proprietary technology that focuses on risk management by crunching millions of loan data points to evaluate the creditworthiness of more than 500 digital lenders and businesses across South-east Asia and Oceania.

The group provides curated access into the private placements space in South-east Asia while financially enabling underbanked individuals and enterprises across the region.

The software analyses data that is detailed to the level of how each microloan that reaches an end-borrower is performing. These end-borrowers are underbanked individuals and companies. Examples of such borrowers include an entrepreneur in Jakarta needing financing for a motorcycle to make deliveries around the city, or a businessman in Manila who wants to start a grocery shop.

The rising global inflation and correction in public markets this year have made private markets an alternative for portfolio diversification. Private debt markets have shown a low correlation to public markets and can provide positive risk-adjusted returns when robust risk management frameworks are applied.

ADDX’s Choo noted that the private credit market has more than doubled in size since 2015 and is now worth more than US$1 trillion worldwide.

“For investors who want exposure to this large and burgeoning asset class, a fund manager’s ability to manage the risk from non-performing loans is vital,” she said.

“The technology Helicap has built to evaluate microlenders is sophisticated, ensuring microlenders that borrow from Helicap are building a sustainable business. The fund’s record of zero defaults by microlenders since its inception stands out within the space.