Recently, we were able to announce that we had hit a milestone of facilitating over $3 million of secondary market trades in various alternative assets on the public platform. Although it is but one part of our business, it is a great validation of what we set out to achieve three years ago.
At that point, we had recognised, firstly, the growth in proportionally held alternative assets as an increasingly important part of an investor’s portfolio. In New Zealand the best examples were Commercial Property syndication and direct agricultural investment but now we are also seeing a more mature crowdfunding market. Secondly, we saw that some of the key elements that made these assets more investable, such as a regular flow of relevant performance information and access to liquidity, were absent. Whilst most of these assets are long-term investments and recognised as such by investors, we also know that people’s circumstances change and sometimes they need access to cash. “How do I get my money out?” is a question that prospective investors are increasingly asking syndicators, crowdfunders and advisers prior to making investment decisions. So, if an Issuer can offer a liquidity solution, its units or shares will likely become more attractive to potential investors.
Syndex was created to deliver those enhancements to investors in the alternative asset class. As time has gone on we have seen increased activity, particularly in recent months. Most of the activity has been in the Commercial Property class where units have changed hands at a discount to offer price of 0.3% - achieving good outcomes for both buyer and seller. Of course, for every seller, there needs to be a buyer to effect a trade. The secondary market offers new investors the opportunity to participate in assets which they have become increasingly interested in, having had the chance to assess performance through the availability of good, relevant information.
We’re delighted with our contribution thus far to a fair, open and transparent market for alternative assets.
You’ll see in our secondary and investment opportunities markets, a diverse range of alternative asset classes - from Commercial Property through Dairy, Horticulture, Diversified Agri, and post-harvesting activities. This provides us with some evidence that alternative asset classes are increasingly recognised as an important sector to participate in. It also demonstrates that good New Zealand privately owned businesses have another avenue to access capital.
Ross Verry is CEO of Syndex and a shareholder. The views expressed above are purely his own. Please assess and research all your investment.