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Home » Our Latest Think Pieces and News » Our January Newsletter
February 16, 2023

By: admin

Our January Newsletter

KEY HIGHLIGHTS
2022 RESULTS
HEIRLOOM FIXED RETURN FUND (“ALTERNATIVE YIELD FUND”)

We are delighted that as of December 31, 2022, the Heirloom Fixed Return Fund’s Alternative Yield Share Class has delivered 14.44% (Euro), 10.11% (USD) and 12.72% (Total Alternative Yield Fund) on an annualized since inception basis.  As of year-end, the Fund’s Fixed Return Share Class also met all its Fixed Return obligations for investors.*

We are also honoured that the Alternative Yield Fund has been recognized by BarclayHedge in its monthly performance ratings as #1 in its Fixed Income – Asset-Backed Loans category for December 2022.

We are thrilled that the Alternative Yield Fund has been ranked #1 in BarclayHedge’s monthly performance rankings in its Fixed Income – Asset-Backed Loans category for December 2022.

Heirloom’s flagship Alternative Yield Fund is designed to serve as a replacement for Fixed Income or absolute return hedge funds in an investment portfolio.  The Fund offers a portfolio of primarily asset-backed and/or income-producing investments that provide a strong hedge against inflation and market turmoil. 

The Fund is currently open to new investors.  Please contact us for more information at investors@heirloominvesting.com.

*Please see the above disclaimer about the calculations of the hypothetical returns.  The Index referenced above has different level of volatility than the Fund, is represented by a fixed group of securities that are materially different from the universe of securities invested in the Fund, is not actively managed and does not engage in any short selling of securities.
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CO-INVESTMENT OPPORTUNITY –
WAITLIST NOW OPEN

Due to strong investor interest, our UK Litigation Finance co-investment opportunity has been over-subscribed.  For those who are still interested in participating, new capacity should be available in March 2023.  Find more details in the Co-Investment section later in this newsletter.   And to register interest, please contact us at investors@heirloominvesting.com.  

UPDATE FROM HEIRLOOM’S PRESIDENT
“I am pleased that 2022 was a successful year for our Heirloom funds, especially in such a turbulent market. The Alternative Yield Fund delivered returns of 10.11%, 14.44% and 12.72% annualized since inception, for its Alternative Yield Share Class USD and Euro and Total Fund respectively.  These far outpaced their benchmarks.  In addition, the Alternative Yield Fund’s Fixed Return Share Class met its Fixed Return targets for investors as at year-end.  And our Heirloom Legal Lending Fund completed its lifecycle providing above-target returns to our investors.

We’re optimistic about what lies ahead in 2023, despite the economic headwinds.

Real interest rates have been persistently negative since 2009. On average, we expect real interest rates to remain negative for the next five years at least. This situation helps overleveraged corporations and governments but is detrimental to savers and investors. A traditional bond or fixed-income security simply isn’t going to deliver the desired results, in our view.


Source: https://www.longtermtrends.net/ 

Instead, investors need alternatives.  They can provide an uncorrelated source of regular income that exceeds the inflation rate and is derived from inflation-resistant hard assets. We firmly believe the Heirloom Alternative Yield Fund is ideal for this environment.

In 2022, the Alternative Yield Fund USD delivered a 10.11% annualized since inception return. That is 361 basis points higher than the official rate of inflation.  This was even better for our EUR investors, as the Fund delivered 524 basis points  against an official Eurozone inflation rate of 9.20%. In other words, the Fund helped investors not only preserve but also create wealth during a period where the cost of living spiraled.

Looking ahead, we see a favorable environment for these alternative yield strategies. For those willing to do the work, and be proactive and nimble, niche assets can generate cash flow that exceeds what a vanilla bond could offer.  We feel proud to do the work to bring these opportunities to our clients through our flagship fund.

Thank you for being part of this journey. And all the best for 2023!”

Sincerely,
Geoff Dover

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CO-INVESTMENT OPPORTUNITY – WAITLIST NOW OPEN
One way we build trust and add value to our investors and network is allowing them to co-invest with us in certain transactions.

Our UK Litigation Finance co-investment opportunity is currently over-subscribed.  But new capacity should be available in March.  As such, we have opened a waitlist to enable additional investors to join for the next round.

The opportunity involves litigation funding Consumer Protection cases in the UK. These so-called “fast track” cases are small (£5-50k funded by us), and backed by strong case law and reviewed by a minimum of 3 solicitors.  And almost 100% of the investments are insured.

Examples include a bank miscalculating interest on credit cards where the plaintiff must just prove it had a card from that bank and was charged interest. 

Co-investors earn a target 12% yield, paid quarterly, for loan notes in the investment vehicle. These notes typically have a 1-year term.   As with all investments, returns are not guaranteed.

If you would like to join the waitlist to be included in this co-investment opportunity or receive more timely updates on other co-investment opportunities, please email us at investors@heirloominvesting.com.

RECENT LINKEDIN ACTIVITY
Heirloom’s investment themes overlap with many of historian Russell Napier.

A quick summary of his forecasts:

-The world should expect a CapEx boom
-Financial repression (high inflation – low-interest rates) will be a dominating theme for the next 15 to 20 years.
-The next 20 years look nothing like the previous 20 years.
-Investors are unprepared for this paradigm shift

Napier suggests gold, but we prefer assets with #AlternativeYield for this new environment.

“The only way to manage the immense debt burden governments have accumulated is to keep real interest rates negative. That’s why we expect rates to remain lower and inflation to remain higher than most investors or the market expects.”

-@geoffdover

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ABOUT HEIRLOOM
Heirloom is a boutique investment manager specializing in “niche alternatives” that would be beneficial to most portfolios but that are difficult to access for individual investors or more mass-focused private banks and investment consultants.
DISCLAIMER
This document (“Document”) is communicated to you by Heirloom Holdings or one of its subsidiaries (“Heirloom”). The Document is directed to professional clients only and financial products and/or services to which the Document relates will only be made available to professional clients and not to retail clients. This Document does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction, and may not be relied upon in connection with any offer or sale. Under no circumstances should this Document be construed as an offering memorandum. Products and services offered by Heirloom are not available for purchase except where explicitly permitted by law. 

IMPORTANT INFORMATION:  The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate and thus an investor ‘s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.
Neither the sender of this report nor the sender’s third party vendors and data providers make any representations or warranties of any kind with respect to the subject matter herein, whether express or implied. The foregoing parties expressly disclaim any warranties of merchantability, fitness for a particular purpose, accuracy, completeness or noninfringement with respect to the subject matter herein.
The information contained in this consolidated investment summary is not the official record any investment account(s).  The office records may be different than what is outlined here.  This information should not be relied on in any capacity.  It has been prepared for informational purposes only and is not a solicitation by or for a purchase or sale of any securities or other financial instrument.
Values of assets “held away” from – are manually entered based on the information from current statement(s) provided by the respective Fund(s ) or the management of  the Alternative Investment. If there are any discrepancies between this consolidated investment summary report and individual account statement(s), individual account statements as provided by the Fund, or the management of the Alternative Investment, should be the ones relied upon.
All information contained in the Document is confidential and may not be copied, reproduced, distributed or communicated to a third party without the express prior written consent of Heirloom. The information contained in this Document is subject to change without notice.

PAST PERFORMANCE MAY NOT BE REPEATED. Investment funds can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of trading performance. Certain performance information is based on estimates of Heirloom or the underlying manager. The Fund is intended for qualified investors who can accept the risks associated with such an investment.  Performance data from certain market indices is provided for information purposes only; a comparison of the Fund’s performance to such market indices is of limited use because the Fund’s portfolio may contain among other things, options and other securities, and may employ leverage, not found in a market index.    

Copyright © *2023. Heirloom Holdings. All rights reserved.
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