SHAREHOLDERS of Income Insurance will have access to a liquidity avenue to buy and sell their shares, thanks to a partnership between digital securities exchange Alta and PhillipCapital.
The Income Insurance Share Liquidity Program is expected to be the largest listing of an unlisted company on a private securities exchange, said Alta and PhillipCapital in a joint statement.
Income Insurance is the corporatised entity that was formerly the insurance cooperative NTUC Income. The corporatisation exercise, announced in January 2022, was completed in September 2022, when the insurance business under the NTUC Income Insurance Co-operative Limited was transferred to Income Insurance. It is now a public non-listed company limited by shares.
The corporatisation was aimed at beefing up Income Insurance’s competitiveness, as it opens up additional avenues to raise capital for growth. Up until now, its liquidity was subject to shareholders’ ability to seek out others looking to buy or sell their shares. Under its old co-op structure, a redemption mechanism enabled share redemptions at par value.
Alta chief executive Kelvin Lee said there is no minimum number of shares required for listing and trading. “We’re excited about the scale of the liquidity programme for Income Insurance, where up to approximately 28 million shares are held by individual shareholders, potentially representing an aggregate value of between S$522 million and S$645 million, based on the range of valuation estimates provided by independent research analysts.”
Income’s last available annual report is for 2021, when its share capital comprised a total of about 108.8 million shares. The proportion held by 24 institutions was 73.9 per cent. Shares held by over 15,900 individuals stood at 26 per cent or 28.3 million shares.
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Income Insurance’s issued share capital stands at S$3.2 billion, as reflected in its Acra record. It did not publish a net asset value (NAV) per share value in its 2021 annual report. But in a set of frequently asked questions on its website, it said the NAV per share (including Treasury shares) at end-December 2022 was S$29.07.
Alta’s Lee said: “Monetisation of shares of unlisted companies is usually tedious and time-consuming. We have been continuously innovating and improving this process for the past few years, and I am glad we were finally able to partner PhillipCapital to launch an ongoing liquidity solution for public, non-listed companies like Income Insurance, and to make trading of those shares available to institutional and accredited investors.”
The spokesperson for Income Insurance said: “The liquidity programme is initiated and managed solely by Alta and PSPL (Phillip Securities Pte Ltd) as independent third parties. We do not have control over and responsibility for such offering. We are also not endorsing or recommending Alta and PSPL’s offering.
“Share liquidity is fundamentally achieved based on willing-seller, willing-buyer basis. We recommend that shareholders seek independent advice and conduct due diligence on whether to use the services offered by Alta and PSPL.”
Under the programme, individual shareholders sell their shares to PSPL first. The firm then sells the shares on AltaX, Alta’s exchange arm, to other institutional and/or accredited investors and other investors verified on Alta.
Once listed, pricing will be transparent, including past bids and asks. Income shares purchased by institutional and accredited investors will be tokenised, with no further action needed by investors.
Lee said private equity has historically been one of the best-performing asset classes on a risk-adjusted basis, but liquidity and the monetisation of shares remain challenges, which Alta sets out to address.
“This is a problem worth solving, because the percentage of startups and private companies that get to IPO, even in the US, is so small that 99 per cent of founders, employees and shareholders never receive liquidity. They spend a decade or more paper-rich, but cash-poor. This strangles entrepreneurship, the lifeblood of innovation, job creation and the broader economy.”
PSPL managing director Luke Lim said: “The partnership (with Alta) empowers our clients to seize opportunities and respond to changing market conditions with unprecedented ease. This is in line with our shared vision of revolutionising capital markets and marks a significant step forward in achieving this goal.”
Alta, formerly Fundnel, claims to be South-east Asia’s largest digital securities exchange for alternative investments. Last year was an active one, with bid and ask orders exceeding US$195 billion, compared to US$32 billion in 2022. There are eight member firms trading on AltaX.
Since 2016, Alta has completed over 1,500 transactions valued at over US$600 million. To date, there are 60 active counters on the exchange, including SpaceX, OpenAI and ByteDance.
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