Hedonova Review: Diversify Your Portfolio with a Single Investment

Everyone knows that you’re supposed to diversify your investments to safeguard your portfolio, but with the ever-expanding range of asset classes out there, it’s nearly impossible to learn enough about each of them. You want to make thoroughly researched and smart decisions about where to put your money, but who has the time to be an expert on NFTs and wine and real estate?

Rather than driving yourself crazy trying to know it all, you could instead put your money in Hedonova, a hedge fund that focuses on alternative asset classes and only requires one simple investment from you. The fund is fully managed and invests in everything from startups to crypto, so you’re automatically diversified.

In this Hedonova review, we’ll cover all the specifics—how it works, risks, returns, etc—so you can decide if it's the right investment platform for you.

Hedonova is a hedge fund, started in 2020, that focuses on alternative investments, allocated across a range of asset classes. The fund’s portfolio currently includes investments in things such as wine, collectibles, crypto, startups, art, P2P lending, and litigation finance. Like other hedge funds, Hedonova provides a way for investors to gain a return on their investment without actively managing the day to day allocation of their portfolio. 

The founders of Hedonova have extensive experience in the world of finance and asset management and a stated goal of providing freedom of choice to their investors. They have indicated that they believe that people should be able to invest all over the world and in all types of assets, and their intention in creating Hedonova is to provide a place for investors to do just that.

How does Hedonova work?

Hedonova is set up as a special purpose entity, meaning it’s registered as a company designed to hold assets. In this case, it’s specifically registered as a Delaware LLC. When you invest with Hedonova, you’re purchasing units they call “blocks”, which represent membership shares in that LLC. These blocks work like mutual fund units, with each block being assigned a net asset value. That net asset value (NAV) is updated daily based on the value of the underlying assets held by the fund. Hedonova takes the money from the purchase of those blocks, pools it, and allocates that money to various assets according to the direction of the fund managers.

Who can invest with Hedonova?

Only accredited individuals* are eligible to invest with Hedonova. The fund is, however, open to international investors, rather than being limited to US residents.

*The current SEC definition of an accredited investor includes those who have a net worth of $1 million or more, those who have a yearly income of $200,000 (or $300,000 when combined with a spouse), and those that hold certain professional licenses.

Single fund covers all the alts

Hedonova provides investors a single place to put their money in order to gain exposure to a wide range of asset classes. Instead of opening individual accounts with a dozen different platforms in order to diversify your portfolio, you can invest with Hedonova and let them handle the diversification for you. Money that you invest into the fund will then be allocated into assets ranging from NFTs to real estate to startups.

Your money managed for you

Since Hedonova is a fully managed fund, your effort stops as soon as you fund your account. The fund managers will take care of choosing investments and allocating money; all you have to do is sit back and watch the returns roll in.

Excellent rate of return

Hedonova has a reported IRR so far of 63.2%, and target returns of 25-30%. These numbers absolutely blow the S&P out of the water, and are significantly higher than other hedge funds report. 

Start investing with just $1000

Unlike a lot of other hedge funds, which may have minimums in the hundreds of thousands to millions range, Hedonova lets investors get started with just $1000. This significantly reduces the barrier to entry for investors looking to gain access to the benefits of a fully managed fund.

Open to accredited investors only

Hedonova is currently only open to accredited investors, which makes this platform inaccessible to a large number of potential investors.

Higher fees than other platforms

The fee structure for Hedonova follows the standard “2 and 20” rule of hedge funds—the platform charges 2% annually as a management fee and then takes 20% of net profits. While this is typical of a hedge fund and may sound entirely reasonable when paired with the low minimum, these fees are considerably higher than certain other types of alternative investment platforms out there.

Yes, you absolutely can. Hedge funds are inherently riskier investments than something like a CD or savings bond, but they also offer much higher potential returns. Hedonova has thus far demonstrated an IRR of 63.2%, with target returns set at an ambitious 25-30%. 

How do I make money with Hedonova?

You make a return on your investment when the value of the blocks you’ve purchased increases. Since Hedonova invests in a wide variety of assets, this value is impacted by everything from swings in the value of cryptocurrencies to startups going public to pieces of fine art being sold. All of these factors are used in aggregate to calculate the NAV of a block, and you make money when the NAV increases to a value higher than what you purchased your blocks for. 

How do I cash out with Hedonova?

In order to cash out, you have to sell your blocks back to Hedonova. There isn’t a secondary market for blocks, so you’ll have to request to liquidate your shares in the fund with Hedonova directly. Once you’ve requested redemption of your blocks, the time it takes to fully exit the fund will depend on the current liquidity of the underlying assets held by the fund. There is no fee for exiting, and you may request liquidation at any time.

Hedonova vs traditional investing

So far, Hedonova has demonstrated returns well above the S&P 500, with returns 15.4% higher since the fund’s inception. Additionally, the fund has a fairly low correlation to the stock market (>0.3), which means that the value of Hedonova blocks won’t necessarily track traditional stocks. All of this is excellent news for investors looking to diversify and protect their portfolio, particularly in a time of relative volatility as we’ve seen in the past couple of years. That being said, the fund is still new, so investors looking for a long track record are out of luck.

Hedonova investors really like the fact that they are able to diversify their portfolio through one simple channel. Rather than having to individually invest in startups, art, wine, real estate, crypto, etc. (not to mention having to do your due diligence and make sure you’re investing wisely in each of these), by investing in Hedonova your investment is spread across many asset classes and managed professionally for you. The ease of this diversification has a huge appeal for many people. Users have also remarked on the excellent customer service, and said that one of the best parts of investing with the platform is the personal touch the investor relations team provides.

The only area in which Hedonova users have indicated they see room for improvement is the platform’s online dashboard; however, technical upgrades are in the works currently, with mobile apps set to roll out in early 2022. 

If you’re an accredited investor looking for a simple and easy way to diversify into alternatives without having to actively manage your investments, Hedonova is an excellent choice. The fund has a low minimum investment, great customer service, and a truly excellent rate of return thus far. For someone who wants to invest for the long term and not have to think about their portfolio in the meantime, Hedonova could be just about perfect.

The only thing we would warn is that the fund is still new, and as with all investments, historical returns are no guarantee of future performance. Those investors who err on the side of caution and would want to see a longer track record before investing may want to look for a more established fund.