New/Updated Platform Reviews
Hedonova is a recently launched hedge fund offering accredited investors exposure to a wide range of alternative asset classes such as real estate, art, fine wine, litigation finance, and startups – often investing through the same platforms we cover here at YieldTalk – with a very low $1,000 minimum investment. The fund has a short track record and prospective investors should be sure to understand the hedge fund fee model, but Hedonova represents an attractive way to gain exposure to a diverse pool of alternative assets with an exceptionally low investment minimum. Our rating: Excellent.
📦 Kickfurther is a novel marketplace where brands who sell physical products can find backers to finance inventory, which is sold on consignment. The repayment period can be relatively short (often a few months) with very attractive returns, but prospective investors should be sure to understand they are purchasing physical product inventory, not an investment security. Our rating: Outstanding.
- 🎶 Republic (our review) has launched what they’re calling the “S-NFT” (or “Security Non-Fungible Token”) for investing in future music royalties. According to Republic “Now, fans can invest in an artists’ next song or album and get paid royalties as a result. Using NFT and blockchain technology gives the investors and the artists complete transparency and a simple mechanism to pay out returns.” More at Republic
Worth Reading this Week
Two outstanding macro pieces came out this week from Andreesen Horowitz (aka “a16z”). (While ostensibly articles like this articulate the trends underpinning the noted VC firm’s investment thesis, those same trends carry implications for a much wider range of asset classes – for example, smaller companies and longer life spans should absolutely color your perspective on certain categories of real estate investments.)
First up, making the case that we’re likely to see a new category of software companies aimed at essentially replacing the central services of a corporation, thereby letting many more classes of workers leave their traditional employers and strike it out on their own:
Much has been written about the proliferation of vertical software tools that help firms run their businesses, but the next generation of great companies will provide integrated, vertical software for individuals going solo.
Second, a look at the “Industrial Bio Complex”, which could bring about changes on a scale last seen in the post-war decades of the 20th century:
This new era of industrialized bio — enabled by AI as well as an ongoing, foundational shift in biology from empirical science to more engineered approaches — will be the next industrial revolution in human history. And propelling it forward is an enormous new driving force, the novel coronavirus SARS-CoV-2, its ever-evolving strains, and the resulting COVID-19 disease pandemic and response — which I believe is analogous to our generation’s World War II (WW2). In other words: a massive global upheaval, but that later led to unprecedented innovation and significant new players.
And speaking of Andreesen Horowitz, things get a bit meta here, but this is a fascinating look at how a16z’s underlying operating strategy (not its investment strategy) represents a major shift in what the VC firm of the future will look like (a shift in part driven by the fact that thanks to equity crowdfunding and low-cost alternative investment platforms, VC firms aren’t the only ones looking to put capital into startups…):
The world is awash with capital, and even the most conservative institutional and retail investors are developing an appetite for riskier bets. This is driven by (1) historically low-interest rates and (2) the winner-take-all nature of many technology-powered businesses. In other words: you are guaranteed to lose purchasing power if you keep your money in so-called safe assets, and a handful of extremely successful investments capture most of the available returns. Investors who try to stay safe or even take risks but miss out on the biggest winners end up far behind.
Around here we mostly focus on alternative investments that typically aren’t available through “regular” investments like stocks and bonds, it’s worth remembering that publicly traded REITs (real estate investment trusts) have been available to everyday investors for decades now, and a new academic study out finds that those publicly traded REITs have outperformed private equity real estate (PERE) funds over a 20-year period:
The research is generating a lot of discussion in both PERE and public REIT circles. “I think it provides evidence that suggests that you should have at least some allocation of your portfolio to public REITs, and perhaps a larger allocation than you had before,” says David Ling, the Ken and Linda McGurn Chair, Professor of Real Estate and Director of the Nathan S. Collier Master in Science of Real Estate program at the University of Florida. Ling authored the report along with Thomas R. Arnold and Andy Naranjo.
After a deep summer slump, Bitcoin has roared back to nearly all-time highs (up 37% this month 😳), in part driven by the expectation that the SEC will soon green-light the first futures-based crypto ETF:
All month long, speculation of imminent ETF approval has driven up Bitcoin, helping it outperform smaller tokens to reclaim 46% of the crypto ecosystem’s total market value. An exchange-traded fund is expected to draw more interest from investors that prefer buying a familiar, regulated product over navigating digital-currency exchanges.
The ultra-wealthy have long been investors in the kind of alternative assets that are now much easier to access for everyday investors, and “family offices” (the private investment funds that manage the finances of the aforementioned ultra-wealthy) have been dialing up their investments in startups:
The world’s ultra-wealthy are increasingly investing in startups, both directly from their family offices and through venture capital funds, according to research from SVB Capital and Campden Wealth. Family offices made up 4.2% of the roughly 23,000 venture capital deals worldwide this year through Aug. 31, more than double their share a decade ago.
Odds and Ends
- “Exotic” alternatives platform YieldStreet (read our review here) announced it’s now offering VC investments in private companies.
- Crypto lending platform Blockfi (read our review here) announced support for buying crypto via ACH.
- Art-investing platform Masterworks (our review) has officially hit unicorn status 🦄, topping a $1B valuation in their latest funding round
- Commercial Real Estate investment platform EquityMultiple (our review) announced the launch of Short Term Notes, offering short-term liquidity (the first series has a 180-day term)
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