Bi-monthly investor update 20th November 2021 


## **What we bought**

### Wine - Rhone Valley wine

Although the Rhone wine region is traditionally viewed as a ‘slow but steady’ regional market, it has been posting some great growth numbers to keep pace with a fine red wine competition. The Liv-ex Rhone 100 index has grown by 11.59% over the past 12 months (as of 30 September 2021), helped by star producers delivering some impressive figures as their brand recognition continues to grow, especially in the important Asia region. We've increased the allocation to wine from the region.

### Equipment Finance - Medical equipment portfolio

The healthcare sector is on fire. We've expanded our equipment financing portfolio to include medical equipment such as PET/CT scan machines, MRI machines, and surgical robots.

### Music royalties

I think investing in music royalties is going to become mainstream very soon. Fans will become owners. Platforms such as Tidal and Royal will make this possible.

![ A chart illustrating the lopsided music streaming model](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%2020th%20November%202021/117214-1637508464-streams-b.webp)

## **What we sold**

### **Cryptocurrencies - Solana**

We've partially exited our holdings of Solana. The investment was made early this year and, with a lot of good luck, has offered a 14x return.

### **Listed equities - Illinois tool works**

We've been invested in the industrial manufacturer Illinois Tool Works (NYSE:$ITW) since 2020. No longer. I love the stock. The company is in the boring business of manufacturing industrial machinery and tools. Industrial manufacturers tend to underperform in higher inflationary regimes. With real inflation flirting with 8%, I think it's the right time to exit.

### Our PayTM positions are taking a hit

The ubiquitous Indian payments super app went public last week and dipped 27% on the listing. We had exited 40% of our holdings before IPO in a secondary transaction while we continue holding the remaining 60%; which is locked in for a year. We're not happy about it and are exploring a synthetic call option to capture the potential upside.

**Picture:** an old photograph of PayTM founder Vijay Shekhar Sharma.

![Old photograph of PayTM founder Vijay Shekhar Sharma](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%2020th%20November%202021/117214-1637526950-ev26svcueaietn7.webp)

### Exploring investment opportunities in the Nordic and Baltic regions

Last year, we invested in an Exchange Traded Fund (ETF) called MSCI Nordic UCITS which has returned 33.85% in the last year, beating the S&P 500 by around 2%. The Nordic countries have long been a blueprint for smaller states with open economies. We're going to increase investments in the region, in all formats of investments.

**Further reading:** [The Success of the Nordic Countries as a Blueprint for Small Open Economies](https://www.intereconomics.eu/contents/year/2018/number/4/article/the-success-of-the-nordic-countries-as-a-blueprint-for-small-open-economies.html),[ What We Can Learn from the Nordic Model](https://www.intereconomics.eu/contents/year/2018/number/4/article/what-we-can-learn-from-the-nordic-model.html)

**Image:** Bohuslän Archipelago, Sweden

![An aerial view of Bohuslän Archipelago in Sweden](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%2020th%20November%202021/117214-1637507893-a7dc531124103676013cb122fc55-cropped.webp)

### Invest via cryptocurrencies

Hedonova investors can how to invest via Bitcoin and Ethereum in a safe, cheap, and compliant manner. We're using Coinbase's payment gateway for this. Investors will not be charged any fee by the gateway (gas fees will apply). Hedonova will not hold on to the cryptocurrency. They will be converted to US dollars and added to the fund's bank accounts for further investment.

![Coinbase logo on a blue background](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%2020th%20November%202021/117214-1637508072-6065d2796183e10019819b65-cropped-2.webp)

## **Answering common questions**

### How is illiquidity risk management?

It's no secret that a large part of our portfolio is invested in illiquid assets. These assets can be hard to sell. We mitigate this risk by structuring investments as equities. Instead of owning the asset outright, Hedonova co-invests in special-purpose vehicles (SPVs). This helps us hold equities representing the actual asset. Equity investments are easily transferable, adding a degree of liquidity to the portfolio.

### When will you be able to use the mobile apps and web apps?

By the end of November, investors will have access to the revamped web application to track their portfolios. By the end of January 2022, we'll also release iOS and Android apps.


Several investments were made and sold. The investments include increasing allocation to Rhone Valley wine, expanding the equipment finance portfolio to include medical equipment, and exploring investment opportunities in the music royalties market through platforms like Tidal and Royal.

On the selling side, holdings of Solana cryptocurrency were partially exited after a significant return, Illinois Tool Works stock was sold due to concerns about underperformance in higher inflationary regimes, and PayTM positions experienced a dip after the company went public.

The exploration of investment opportunities in the Nordic and Baltic regions is highlighted, considering the success of smaller open economies in the Nordic countries. Further investments will be made in the region in various formats.

Investing via cryptocurrencies like Bitcoin and Ethereum is now possible for Hedonova investors through Coinbase's payment gateway, ensuring safe, cheap, and compliant transactions.

Bi-monthly investor update 20th November 2021

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