The Hyperion Fund has been in operation for over a year now. After concluding a successful capital raise and officially launching in June 2018, the fund has since grown its Net Asset Value (NAV) by over $4 million at the time of writing.
I think that it is important to highlight the unique attributes of the Hyperion Fund and how this revolutionary investment vehicle has democratized early-stage investing for retail participants.
Venture Capital has traditionally been the domain for either institutional investors or exceptionally high-net-worth individuals who qualify for participation in these funds.
Retail participants, like you and I, do not have access to these funds due to, among other factors, the large capital outlay required and the lengthy lock-up periods.
The average returns realized from these alternative investments have historically been significantly higher than traditional stock market returns. The retail participant is therefore unable to partake in an asset class that can potentially provide great upside for their long-term investment portfolio.
Being the first tokenized Venture Capital fund in the world, the Hyperion Fund has managed to eliminate two of the biggest hurdles hindering the participation of retail participants in early-stage investing, the first being the large capital outlay required.
Through fractionalized tokenization, participants are able to purchase as little as $0.01 worth of the Hyperion Fund through the IHF token. This opens the fund up to anyone looking to diversify their existing portfolio into venture capital, without the need to commit large sums of their money.
The second hurdle that the Hyperion Fund has overcome, is the ability to enter and exit your position at will. Traditional venture capital requires investors to lock-up their capital for up to 10 years without being able to access it.
IHF tokens are free to trade 24/7 with other market participants, providing token holders with the freedom of instant liquidity.
Each IHF token represents a proportional share in the Hyperion Fund. In the case of the Hyperion Fund, the underlying assets are not liquid, and thus, the fund cannot offer an on-demand redemption function synonymous with an open-ended mutual fund.
In order for the listed trading price of IHF (price on exchange) to track the NAV price per token (the price determined by the Fund’s managers), there needs to be some form of value distribution to token holders that ties directly to the intrinsic value of the Fund. This is done by implementing a token buy-and-burn protocol.
Much like a share repurchase in traditional markets, the Hyperion Fund will place buy orders on exchange at the prevailing NAV price per token. This method distributes fair value back to token holders wishing to liquidate their holdings.
The accumulated tokens are then removed from the supply, resulting in a realisable NAV price per token.
In the scenario where the IHF token is trading at a discount to NAV at the time the buy-and-burn is implemented, a number of IHF tokens in the order book will be purchased below NAV until the prevailing spot price reaches the NAV price per token.
In this case, the buy-and-burn will result in an increased NAV price per token for remaining token holders, subsequent to the purchased tokens being removed from the supply.
For more information, a number of Hyperion Fund specific materials have been released and are available through the Invictus Capital website:
Hyperion Litepaper: The Hyperion Litepaper covers the rationale behind the fund, along with the technical workings behind some of the accounting and valuation techniques used.
Hyperion Fact Sheet: The Hyperion Fact Sheet has recently been released and provides existing and prospective investors with a quick overview of the fund and what it is comprised of.
Hyperion Quarterly Report: Released on a quarterly basis, this report covers some relevant market commentary over the past quarter, performance statistics, along with detailed updates on each portfolio investment in the Hyperion Fund.
Full updates on each of the holdings in the Hyperion Fund will be included in the Quarter 3 Report, due to be released in mid-October. In the meantime, find updates below for our two largest positions in the Hyperion fund:
Quantfury, Hyperion’s largest investment to date, has been experiencing constant growth in its user base with monthly trade volumes in the region of $5 billion.
The business is doing exceptionally well and planning on some major expansions over the coming months. This is certainly a major driver of value to the Hyperion Fund and its token holders.
Quantfury has recently released an updated app, available on both iOS and Android. The latest version includes a specific section that accounts for all the dividends received on stocks and ETF’s.
The update also provides an amazing innovation in the form of zero-fee trading with back-to-back prices on crypto pairs from the Binance exchange along with their order book support, in addition to the Bitfinex pairs that already exist.
The second-largest holding in the Hyperion Fund is NOIA. The NOIA token has recently started trading on both Kucoin and Hotbit. The token is currently trading above its initial sale price of $0.03 with healthy trade volumes.
William Norton has recently been onboarded as a co-founder of NOIA. William has served as Co-Founder of Equinix (the largest data center operator in the world — currently valued at $42B). The team has since released two publications, namely; The Programmable Internet and NOIA Tokenomics Whitepaper.
We highly recommend you find some time to read these documents as it provides the most detailed description of what NOIA Network is currently building. We are excited to watch the growth of this highly disruptive technology!
Andrew and the Invictus Capital team