Bi-monthly investor update 4th December 2021 


## **What we bought**

### Opensea (Unicorn startups)

In the early days of the Internet, Amazon was not the first marketplace, it was the fastest and the cheapest. At the dawn of blockchain technology, Opensea is the fastest, cheapest, and first. We've invested at a 35% discount.

### Wedding loans in India (P2P lending)

It’s wedding season in India. Weddings are an important part of the social fabric with families spending a large chunk of their net worth. Wedding loans are short-term, have low default rates, and are secured with collateral such as property.

### Commercial arbitrations (Litigation financing)

We have increased allocation to commercial arbitration in the United Kingdom. Cases include breach of contracts and intellectual property infringement. These cases tend to be settled within one year and are cheaper than those that go to trial.

### Medical equipment (Equipment Finance)

We continue to fund leasing medical equipment such as CT/PET scan machines and MRI machines and are working with manufacturers like General Electric and Siemens. We're able to leverage existing relationships between hospitals and equipment manufacturers and enter as a funding partner.

## **Why are we buying Rhone Valley Wine?**

In the last update, I wrote about our fresh investments in wine from the Rhone Valley region. It's easy to confuse wine that tastes great with investment-grade wine. We need to look at the numbers. There are two reasons why we like the region:

### Price momentum

The price of wines from the region is picking up faster than the broader wine index. Momentum picked up significantly after the [United Stated removed tariffs on European wine](https://www.foodandwine.com/news/us-eu-alcohol-wine-whiskey-tariff-agreement). I think the price momentum will continue for the next three to five years.

### Stability

You will see in the second chart below that wine prices from Rhone are very stable (measured in terms of standard deviation). The stability can be traced to the weather. The Mediterranean-influenced region enjoys a warmer, more stable climate with hot summers and mild winters. This contributes to richer, brighter, higher- alcohol wines.

![Graph comparing Rhone and main Liv-ex indices from 20 Sep 2016 to 30 Sep 2021](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%204th%20December%202021/whatsapp-image-2023-06-23-at-20.21.29.webp)

**Catching up returns**

Wine from the Rhone region underperformed till March 2020, post which returns picked up and outperformed the broader wine index.

![Graph displaying the standard deviation of Liv-ex regional indices from 30 Sep 2016 to 30 Sep 2021](https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Bi-monthly%20investor%20update%204th%20December%202021/whatsapp-image-2023-06-23-at-20.19.13-_1_.webp)

**Low volatility**

Another reason for us to increase allocation to Rhone Valley wine is the low volatility, comparable to blue chip Bordeaux wines of France.


Hedonova made several strategic investments. They invested in Opensea, a unicorn startup in the blockchain space, taking advantage of a 35% discount. They also entered the wedding loans market in India through P2P lending, recognizing the significant financial commitment families make during wedding seasons. This investment offers short-term loans with low default rates and collateralized by property.

Hedonova increased their allocation to commercial arbitrations in the UK, focusing on cases involving breach of contracts and intellectual property infringement. These cases typically have shorter resolution times and lower costs compared to trials. Additionally, they continued to invest in medical equipment financing, partnering with manufacturers like General Electric and Siemens to provide funding for leasing CT/PET scan machines and MRI machines.

The decision to invest in Rhone Valley wine was based on two key factors. Firstly, the price momentum of wines from this region has been increasing faster than the broader wine index, especially after the removal of tariffs on European wine by the United States. Hedonova expects this price momentum to continue for the next few years. Secondly, Rhone Valley wines exhibit stability in terms of price volatility, attributed to the region's Mediterranean-influenced climate with consistent weather conditions. This stability is comparable to the renowned blue chip Bordeaux wines of France.

Bi-monthly investor update 4th December 2021

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