Singapore: CapBridge launches $100m VC fund

Visual of Capbridge homepage. February 2016.

Singapore’s CapBridge has announced that it is launching a $100 million pre-IPO (initial public offering) fund in collaboration with Gordian Capital.

This growth-stage VC fund that aims to link startups with institutional investors, is a sub-trust fund under the CapBridge Investment Trust (CIT), said to be a rules-based trust investing in private securities.

Incepted in 2015, CapBridge is an online capital-raising platform that enables institutional and accredited investors to invest in growth-stage enterprises companies via venture capital financing and pre-IPO placement. It is partnered with the SGX and Clearbridge Accelerator.

In an exchange with The Business Times, CapBridge chief executive officer (CEO) Steven Fang explained: “The rules-based nature of CIT ‘automates’ the selection criteria and removes the need for active discretionary management, which reduces the fund’s expense load.”

CIT will not be competing with venture capital (VC) funds but will operate in a complementary co-investment role. According to Fang, it will be targeting investments alongside top-tier VC firms. With its launch of Thursday, 16 February 2017, CIT will establish a series of sub-trust funds, with the pre-IPO fund being its first fund. According to CIT, over the next five years it will target investments in venture-backed enterprises in pre-IPO investments.

Private investors traditionally lack access to the asset class which the venture-backed securities of technology enterprises represent. Despite their volatility and risk, venture capital assets – which are generally unavailable and lacking in transparency – represent an asset class which generates significant returns.

Dr Fang said, “Given the efficiency of a rules-based trust structure, the pre-IPO fund has the potential to expedite pre-IPO capital raising, making Singapore an attractive fund-raising destination for growth companies.”

Despite the uncertainty of the global economic climate, VC funding in Southeast Asia, and Singapore by extension, continues to remain favourable. The city-state’s environment remains resilient relative to the rest of Asia due to abundant dry powder, a pro-business setting that favours entrepreneurs and the growing focus of local startups to leverage on economic growth narrative and expanding middle class of the Southeast Asian region.

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