Hedonova Review: A Hedge Fund of Alternative Assets

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Hedonova - Hedge fund of alternative investments

This article is sponsored by Hedonova. All opinions are my own.

Many people want to reserve part of their portfolio for alternative investments. There’s a lot to like about alternative assets, like diversification and the potential for excellent returns. But there are also a few challenges. For example, many alternatives require a large investment, and most people aren’t familiar enough with the details to make sound investment decisions.

Hedonova is a novel platform that aims to make alternative investments more accessible and more profitable.

What is Hedonova?

Hedonova is a hedge fund of alternative investments. The company’s website says, “Think mutual fund, but for alternative assets.” As an investor, you can get exposure to many different types of alternatives through a single investment.

The experts at Hedonova will handle all of the details and manage the investments of the fund. While you can invest in alternative assets on your own, there are a few key benefits to going through Hedonova:

  • Broader exposure. Instead of investing in a single alternative, you’ll get exposure to many assets through Hedonova, providing greater diversification.
  • Start with just $1,000. Many alternative investments require a high minimum investment. Hedonova’s minimum is just $1,000.
  • Expert management. With Hedonova, you can invest in assets like fine art, wine, real estate, royalties, and more, and you don’t need any expertise in these fields. As a managed fund, Hedonova’s experts handle all of the investment decisions for you.

Hedonova is headquartered in Los Angeles, but the company’s team members are spread throughout the world. The fund is open to U.S. and international investors.

What Does Hedonova Invest In?

Hedonova currently invests in 13 different asset classes:

  • Startups
  • Cryptocurrencies
  • Listed equities
  • Real estate
  • Equipment finance
  • Litigation finance
  • Agronomy
  • Art
  • Carbon credits
  • NFTs
  • Collectibles
  • Wine
  • Students

You can see the breakdown of the different asset classes and how Hedonova’s portfolio is spread out among these classes at Hedonova’s website.

Who Can Invest?

Hedonova is open to United States and international investors (70% of Hedonova’s investors are from the United States, 10% from India, and 20% from Europe). However, the fund is only open to accredited investors. To qualify as an accredited investor, you must meet one of the following criteria:

  • Earned annual income of $200,000 for an individual (or $300,000 combined income if married) for the previous two calendar years, with a reasonable expectation for the same level of income in the current year.
  • Net worth exceeding $1,000,000 (individually or combined with a spouse), excluding your primary residence.

Hedonova Fees

Hedonova charges a 1% annual management fee (1% of your account balance) plus a 10% performance fee (10% of your profits). These fees are high relative to many types of alternative investments, however, they are lower than the typical hedge fund. Many hedge funds charge 2% management fees and 20% performance fees. According to Hedonova, their fees are 60% lower than the industry average.

You can see more details about fees on Hedonova’s website.

Performance

Hedonova has only been around since 2020, so that’s a short amount of time to gauge the level of success. However, the results to date have been impressive. According to Hedonova, the fund has produced a net internal rate of return of 55.2%, or 15.4% alpha over the S&P 500.

You can check the Performance page at Hedonova to see updated statistics.

Hedonova Pros and Cons

Of course, every investment comes with its own unique pros and cons. If you’re trying to decide if Hedonova is the right choice for you, here are some of the important factors you should consider.

Pros

  • Potential for excellent returns. Hedonova aims to maximize the returns for investors. Although the fund has only been in existance for a short time, the track record to this point shows that it has the potential to do very well.
  • Low correlation to the stock market. Most of the asset classes Hedonova invests in have a low correlation to the stock market. If you’re looking for an investment that won’t fluctuate up and down along with the stock market, Hedonova could be a good choice.
  • Low minimum investment ($1,000) compared to most other alternatives. Many alternative investment platforms require higher mininums. The minimum for Hedonova looks especially low when you consider that you’re able to invest in many different asset classes with just $1,000.
  • Diversification within the fund. Instead of investing in a single alternative asset, you can get access to a diversified portfilio of alternatives through Hedonova. The portfolio also includes investments throughout the world to add even more diversification.
  • Passive investment. Investing in Hedonova is completely passive. All you need to do is add money to your account and the Hedonova team will handle all the investment decisions for you. You won’t need to spend time researching specific investments and it’s completely passive.
  • Open to investors outside the U.S. Many platforms are open only to investors in the United States, but that’s not the case with Hedonova. Individual and institutional investors from around the world can invest, and Hedonova’s structure is tax-friendly for international investors.
  • Liquidity. When you’re ready to liquidate your investment, you’ll place a redemption request through the online dashboard or via email. Your money will be eligible for a full withdrawal within 30 days. Many alternative investments provide very limited liquidity or no liquidity at all, so having the option to get your cash in 30 days or less is excellent.

Cons

  • Only open to accredited investors. Unfortunately, you won’t be able to invest with Hedonova unless you qualify as an accredited investor.
  • Limited track record (founded in 2020). Like any new platform, Hedonova has a limited track record. The performance listed on Hedonova’s website is impressive, but it only goes back to 2020.

Who Should Invest in Hedonova?

Now that we’ve looked at the details of Hedonova, you may be wondering who this platform is right for. Hedonova is ideal for:

  • Accredited investors looking to diversify beyond the stock market
  • Investors looking for a single-window entry into the alternative investments space
  • International investors looking to invest in the fast-growing alternative space

Of course, investing in Hedonova comes with risk, so be sure to perform your own due diligence before investing. Please visit Hedonova to get more information or invest.



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