Managing Director, Zero One, Zero One

Vincent Fernando, CFA

20 years of experience researching capital markets in Asia and the USA.

Managing Director, Zero One

The Future of Private Market Unicorns in a Post-Pandemic World

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Thematic (Sector/Industry)

Laos Financials / Thematic (Sector/Industry)

<div class="content-highlight"><h2>What You Need to Know</h2></div><ul>
<li>
Corporate debt plays a key role in capital markets. In general, corporate debt ‒ as compared to other asset classes ‒ generates more consistent returns, represents lower investment risk, and provides reliable cash payouts in set intervals. Instruments such as corporate bonds, notes, and commercial papers make corporate debt a preferred option for more risk-averse investors while acting as a unique tool in diversifying one’s portfolio in the event of economic fluctuations.</li>
<li>
The corporate debt market remains inaccessible for many investors and companies. Despite its key role in capital markets, the corporate debt market prices out many investors, start-ups, and small-to-medium enterprises (SMEs) due to its over-the-counter nature, high minimum investment sizes, and hefty issuance &amp; transaction costs.</li>
<li>
Distributed Ledger Technology (DLT) can drastically lower debt investment sizes, providing more investors with access. For example, by leveraging smart contracts, corporate bonds at S$200,000 tranches could potentially be broken down and traded in smaller slices of S$10,000. This allows more people, including lower-end accredited investors (AIs), greater access to corporate bonds while potentially paving the way for higher interest debt issued by start-up and SMEs who are now able to issue debt at lower sizes.</li>
<li>
DLT can dramatically reduce debt issuance costs by up to 97% and allows more companies to access debt financing. According to a <a href="https://www.sustainablefinance.hsbc.com/mobilising-finance/blockchain-gateway-for-sustainability-linked-bonds" target="_blank" rel="noopener">2019 Blockchain Report</a> by HSBC and the Sustainable Digital Finance Alliance, full DLT automation could reduce the total issuance cost of a US$100million bond from US$3.6 million to US$127,000 ‒ effectively a 97% cost reduction. This enables more companies ‒ particularly start-ups and SMEs ‒ to tap debt capital markets for financing.</li>
</ul>Important Note: This research is commissioned by iSTOX in collaboration with Zero One. iSTOX is a next-generation private capital markets platform that provides accredited investors with access to previously out-of-reach investment opportunities. Click <a href="https://istox.com/" target="_blank" rel="noopener">here</a> to learn more.

What You Need to Know

Corporate debt plays a key role in capital markets. In general, corporate debt ‒ as compared to other asset classes ‒ generates more consistent returns, represents lower investment risk, and provides reliable cash payouts in set intervals. Instruments such as corporate bonds, notes, and commercial papers make corporate debt a preferred option for more risk-averse investors while acting as a unique tool in diversifying one’s portfolio in the event of economic fluctuations.

The corporate debt market remains inaccessible for many investors and companies. Despite its key role in capital markets, the corporate debt market prices out many investors, start-ups, and small-to-medium enterprises (SMEs) due to its over-the-counter nature, high minimum investment sizes, and hefty issuance &amp; transaction costs.

Distributed Ledger Technology (DLT) can drastically lower debt investment sizes, providing more investors with access. For example, by leveraging smart contracts, corporate bonds at S$200,000 tranches could potentially be broken down and traded in smaller slices of S$10,000. This allows more people, including lower-end accredited investors (AIs), greater access to corporate bonds while potentially paving the way for higher interest debt issued by start-up and SMEs who are now able to issue debt at lower sizes.

DLT can dramatically reduce debt issuance costs by up to 97% and allows more companies to access debt financing. According to a 2019 Blockchain Report by HSBC and the Sustainable Digital Finance Alliance, full DLT automation could reduce the total issuance cost of a US$100million bond from US$3.6 million to US$127,000 ‒ effectively a 97% cost reduction. This enables more companies ‒ particularly start-ups and SMEs ‒ to tap debt capital markets for financing.
Important Note: This research is commissioned by iSTOX in collaboration with Zero One. iSTOX is a next-generation private capital markets platform that provides accredited investors with access to previously out-of-reach investment opportunities. Click here to learn more.

Unlocking the Potential of Digital Debt