\"Hedonova: Making alternative assets accessible with $5,000 minimum investment\"

Tell us about Hedonova, what does your company do?

Hedonova is a US-based Hedge fund that has a large interest in the cryptocurrency market and 12 different alternative assets. Hedonova invests in asset classes such as Cryptocurrency, NFTs, emerging markets, start-ups, real estate, art, and more.

Can you let us know the different offerings Hedonova offers? What are the different types of alternative assets one can invest in?

Our fund's objective is to provide our clients with a single investment that grants them access to non-stock market investments. The asset classes we invest in do not have a lot of information available about them on the internet, making it difficult for laypeople to conduct research or obtain adequate data to make informed decisions. Even if you do manage to obtain sufficient data, the minimum investment required to enter these classes is often very high, sometimes exceeding $500,000. We have created an elegant solution that allows anyone with $5,000 to access a range of alternative investments through a single fund. Think of us as a mutual fund for alternative assets. From an investment perspective, this is fantastic. The asset classes we invest in have nothing to do with one another. In addition to being uncorrelated with the stock markets, they are also uncorrelated with each other. For example, real estate has nothing to do with music royalties, litigation finance has nothing to do with art, and startups have nothing to do with wine prices. If one or two asset classes underperform, there's always a bull market somewhere else.

What is the minimum investment amount an investor can start with? What are the benefits of investing in hedge funds?

The current minimum investment is $5,000 or its equivalent in the investor's currency. We support every currency in the world. There is a lot of misinformation on the internet about hedge funds, such as the notion that they are only for very wealthy investors. According to the law, accredited investors, which constitutes 15% of the US population and 8% of India's population, can invest in hedge funds, which amounts to a significant number of people. Most hedge funds concentrate on a narrow strategy, some of which can be highly lucrative. Two, the core benefit of investing in hedge funds is that they are not limited by the choice of instrument. Hedge funds can go Long or short, depending on market conditions, and have the ability to create contracts that protect investors. For example, when we invest in crypto currencies, we don't just buy bitcoin or Ethereum. We take crypto exposure via structure products which are capital protected derivative instruments meaning when cryptocurrencies fall your capital is protected and cryptocurrencyrises you get the profit.

Can you state some of the products into which your company normally makes its investments?

Our portfolio is divided into three parts: 45% of the portfolio is income generating and is invested into cash flow generating assets like equipment finance, litigating finance and music royalties. The next 40% is invested into growth assets like real estate, startups and agricultural holdings and the last 15% is invested into short term arbitrage opportunities. An example would be carbon credits. Carbon credits are a $250 billion asset class but are traded on some 20+ exchanges all over the world. This fragmentation leads to arbitrage opportunities. Carbon credits trade at around €70 in Asian markets like India and China while in Europe they trade for €100. We buy from Asian markets and sell on European exchanges.

Does currency risk exist? How is currency risk-managed at Hedonova?

Currency risk is central to our risk management approach, so much so that we have a separate office for it. 45% of the fund is invested outside of the United States, hence in non-dollar investments exposing us to significant currency risk. Instead of centralizing risk management, we've taken a decentralized approach. We use derivatives on local exchanges, that is, in the country where we have made the investment in order to reduce currency fluctuation exposure. This cost us around 130 basis points instead of the usual 400 basis points. For example, we have invested approximately $40 million in India, now, instead of hedging the US dollar and Indian rupee on the London exchange, we use local derivatives on the National Stock Exchange to control risk.

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