Aggregate Asset Mgmt seeks to raise S$5.2m via 1exchange listing

Singapore

1EXCHANGE (1X), the private securities exchange backed by the local bourse, could see its first private company listing in the coming months.

Singapore-based Aggregate Asset Management (AAM) is looking to raise S$5.2 million via a private listing of about 5 per cent of its shares on 1X, the boutique fund manager told The Business Times. AAM plans to offer about 17,300 of its shares to accredited investors on 1X, with the reserve price set at S$300 per share.

Of the offered shares, about 6,900 shares will be newly-issued. The other 10,400 shares will be from AAM's founders, Wong Seak Eng, Kevin Tok and Eric Kong, who each owns 25 per cent of the company at present. AAM may offer more shares on 1X depending on demand, capped at 15 per cent of its enlarged capital.

But the firm may re-evaluate its options if the price of the offered shares, which will be set via a special auction process, turns out to be less than S$300. "We may consider to stop this offering and see what other options are available," AAM co-founder and executive director Mr Wong told BT.

1X is designed for private companies to list up to 30 per cent of their shares, providing an alternative means of raising capital, as well as access for accredited investors to invest in these companies.

Investment platform CapBridge, which is affiliated with 1X and also backed by the SGX, is acting as a placement agent for firms seeking to list on 1X. Besides AAM, CapBridge is currently working with at least two other companies towards a private listing on 1X, said CapBridge CEO Johnson Chen.

AAM itself kicked off book-building on May 3. It has garnered bids from interested accredited investors for over S$3.5 million worth of the offered shares thus far. The capital raise closes on June 14.

A private listing is viable as it is difficult for a fund manager to obtain a bank loan for growth, said AAM co-founder and executive director Kevin Tok. "We did not have many options in the market all along . . . We've been following 1X for a while and wanted to try this platform," he said.

AAM will use the proceeds to beef up its operations, hire new staff and invest in data tools to support its quantitative investment methods. Part of the proceeds will also be used to buy out minority interests in AAM, raising the founders' collective stake above 75 per cent.

However, the pricing of the shares will be a key determinant for AAM's next steps. The price will be set through a Dutch auction, whereby potential investors on 1X submit bids for the number of shares desired and the price they are willing to pay.

The Dutch auction then assigns investors shares starting from the highest bid. The price of the last successful bid, which would be the lowest price of all alloted bids, becomes the clearing price that all investors pay for the shares.

The S$300 per share reserve price set by AAM represents a 32 per cent discount to AAM's valuation of S$158 million (translating to S$441 per share), as determined via an independent valuation by IHS Markit.

When asked if AAM may eventually consider going public, Mr Tok said: "An exit strategy for our investors could be an IPO or other methods. But if it's an IPO, that could be five to seven years (away)."

1X looks forward to welcoming "growth companies" like AAM on its platform, said 1X CEO Choo Haiping. "We are a listing venue that's already fully committed for issuers," he said.

Mohamed Nasser Ismail, head of equity capital markets at SGX, added: "As fast-growing regional companies access private capital through platforms like 1X, we will also work with these companies to strengthen their capabilities in key areas such as governance and financial reporting, so as to better prepare them for a public listing when they are ready."