Nakano Investments
Nakano Investments
Quarterly report · Q4 2020 · Nakano & Centerpitch
Confidential
2020-12-31
01 · Overview
Consolidated cash
$170k
+12.6% QoQ
Combined equity
$2.65M
Nakano $2.65M · CP —
Private portfolio (MTM)
$693k
on $1.16M invested · $643k returned
Public portfolio (MTM)
$2.31M
-$274k unrealized
2020 expenses (ann.)
$23k
$23k YTD

2020 gross returns: 18.9%, or $641k (+26.4% YoY). While the annualized investment return for the public portfolio was strong, our actual return was lower. On a gross basis, the public portfolio returned 13.5% across all risk classes, or $324.0k on an average principal balance of $2.40m. In addition, we received $317.9k in excess returns (essentially, money over our initial investment) from our private equity portfolio, from Durbin Creek and ValFund (as well as a little bank interest) — profit against a principal total of $987.9k, or 32.2%. In total, we received approximately $641.9k in profit against $3.39m in investments, or a 18.9% return, pre-tax.

Consolidated cash, quarterly

-$220k$252k$723k$1.2m$1.7m201820192020

Balances by account

eTradeeTrade: $145,545$146kWFWF: $24,179$24k
Source: Nakano_Summary_CASH_EXPENSE REPORT_(2026_06_30) DRAFT.xlsx · “Running Cash Balances”
02 · Expenses
Consolidated (Nakano + Centerpitch)
2020 YTD$23,494
Annualized$23,494
2019 full year$28,856
-18.6% YoY (annualized)
2016: $0162017: $5,373172018: $12,647182019: $28,856192020: $23,494202021: $28,031212022: $36,308222023: $50,29523$50k2024: $39,759242025: $26,173252026: $17,25426$17k
Nakano
2020 YTD$23,494
Annualized$23,494
2019 full year$28,856
-18.6% YoY (annualized)
2016: $0162017: $5,373172018: $12,647182019: $28,856192020: $23,494202021: $28,031212022: $36,30822$36k2023: $21,914232024: $7,359242025: $4,631252026: $2,00626$2k
Centerpitch
2020 YTD$0
Annualized$0
2019 full year$0
2016: $0162017: $0172018: $0182019: $0192020: $0202021: $0212022: $0222023: $28,381232024: $32,40024$32k2025: $21,542252026: $15,24726$15k

2020 spend by line item (consolidated)

Office RentOffice Rent: $15,065$15,065CreditcardCreditcard: $4,015$4,015Accountant FeesAccountant Fees: $2,500$2,500Legal FeesLegal Fees: $1,459$1,459Other ExpensesOther Expenses: $1,400$1,400ErrorError: $1,139$1,139Webpage EmailWebpage Email: $180$180State/City FeesState/City Fees: $169$169Video Meeting ServicesVideo Meeting Services: $158$158OtherOther: $210$210

2020 expenses: $23.5k (-18.6% YoY). Office rent was slightly up due to Rad's annual inflation adjustment and the 0.5% increase in sales tax (which for some reason hits office rentals). I killed a couple of subscriptions over the year; the remaining ~$4k is driven mostly by Grant's. Legal/accounting is up, mainly due to the Smartemis transaction; these amounts still seem pretty modest to me, relative to the size of our investments. Wells is still a rip-off in terms of bank services; we will deal with this in 2021. Ultimately, my view is that keeping our expenses down to sub-$2k per month—rent inclusive—is a welcome target but probably an unlikely long-term one if we become more active in the kinds of deals we want to do.

Source: Nakano_Summary_CASH_EXPENSE REPORT_(2026_06_30) DRAFT.xlsx · Expenses_Summary / Expenses_Nakano / Expenses_Centerpitch · full tables in the appendix · annualization holds Accountant Fees, State/City Fees, Client Entertainment, and Internal Events at actuals
03 · Equity balances
Nakano Investments LLC
Total equity$2,654,236
Design target (D/W)80 / 20
Drexler $2,124,236 (80.0%)Wiesner $530,000 (20.0%)
$0$717k$1.4m$2.1m$2.9m2017201820192020
Centerpitch Investments LLC

no data

Source: Nakano_Summary_CASH_EXPENSE REPORT_(2026_06_30) DRAFT.xlsx · Nakano_Equity / Centerpitch_Equity
04 · Private portfolio

Private deals done: 2, or $425.5k (-33.8% YoY). We did two private equity/venture investments in 2020 (Smartemis & Northfield), and looked at one other seriously (Laeben's MD AirSupport). Total investment was ~$435k. This compares to one deal in 2019 (NextAlim), and two upsizes (ScreenMeet & AB Real Estate), for a total investment of ~$657.6k. While the scale of the 2020 business in this sector might seem pretty average for us, I feel like we should be targeting more like $750k+ in this kind of investment per year. (The simple math: divide our current portfolio MTM of ~$4.7m by our average deal life of 4 years, and assume we want the majority of our money invested in these kinds of deals.)

DealFirst fundingInvestedCash receivedRemaining valueMOICOutperformance case
Nakano Investments LLC
ValFund
Jun 2017$470,656$642,987$01.00×—
Northfield
Residential real-estate development (Principal: Patrick Zalupski)
Aug 2020$250,000—$250,0001.00×—
ScreenMeet
Cloud-native remote support SaaS (Principal: Ben Lilienthal)
Jun 2021$199,999—$199,9991.00×—
Smartemis
Veterinary services — France, Germany (Principal: Bill Hughson)
Mar 2022$185,490—$185,4901.00×—
NextAlim
May 2021$57,561—$57,5611.00×—
Nakano subtotal$1,163,706$642,987$693,0501.00×
Consolidated$1,163,706$642,987$693,0501.00×

Invested (light) vs total value — paler segment is cash already returned

ValFundValFund invested: $470,656$471kValFund cash returned: $642,987$643kNorthfieldNorthfield invested: $250,000$250kNorthfield remaining value: $250,000$250kScreenMeetScreenMeet invested: $199,999$200kScreenMeet remaining value: $199,999$200kSmartemisSmartemis invested: $185,490$185kSmartemis remaining value: $185,490$185kNextAlimNextAlim invested: $57,561$58kNextAlim remaining value: $57,561$58k
Source: Nakano_Portfolio_Data.xlsx · Deal_Registry / Deal_Transactions / Deal_Valuations · marks are total deal value (report-sourced); Remaining value = mark − cash received, which is what counts toward portfolio value (received cash already sits in the cash accounts) · MOIC = total value / invested · deals, marks, and cash received are as of the report date · open deals with no dated mark yet are carried at cost
05 · Public portfolio

All public securities are held at Nakano Investments (eTrade and Interactive Brokers). Centerpitch holds no public positions.

Open positions (MTM)
$2.31M
-$274k vs cost
Realized G/L, 2020 YTD
$169k
+ $23k dividends
eTrade NAV
$2.91M
broker-reported, Dec 31

Daily marks — securities value by account

$0$659k$1.3m$2.0m$2.6m2020
TotaleTradeIBKR

Performance vs indexes (time-weighted)

CumulativeCAGR2020 YTD
Portfolio+6.5%+4.0%+16.9%
Blended benchmark+30.5%+18.0%+22.6%
S&P 500+36.6%+21.4%+18.3%
MSCI ACWI+32.2%+19.0%+16.3%
Japan (EWJ)+29.9%+17.7%+15.4%
Europe (VGK)+19.0%+11.4%+6.1%

Time-weighted: daily returns of the securities book chained with buys/sells neutralized as external flows; dividends and option premiums count as return. Base 100 on 2019-05-24. The blended benchmark applies the portfolio's own daily bucket weights to matching index returns (US equities→SPY, Japan equities→EWJ, Europe equities→VGK, China equities→MCHI, US bonds/bills→BIL, Crypto→ETH-USD; dividend-adjusted USD ETFs). Current mix: US equities 100%. T-bill discounts recognize at purchase; delisted names (ALRN, LUMO) excluded.

Open positions

TickerQtyCost basisLast price (local)MTM (USD)GainWeight
eTrade
SCHO11,009$567,459$51.39$565,753-0.3%24.5%
ABBV3,000$278,254$107.15$321,450+15.5%13.9%
BABA1,300$341,844$232.73$302,549-11.5%13.1%
JNJ1,500$223,721$157.38$236,070+5.5%10.2%
GLD800$127,959$178.36$142,688+11.5%6.2%
APHA15,000$85,262$8.99$134,850+58.2%5.8%
CVS1,500$92,650$68.30$102,450+10.6%4.4%
SPTI3,000$99,565$33.06$99,180-0.4%4.3%
SLRC5,000$81,984$17.51$87,550+6.8%3.8%
SPSB2,500$78,108$31.40$78,500+0.5%3.4%
FMC600$66,247$114.93$68,958+4.1%3.0%
BAC1,500$35,290$30.31$45,465+28.8%2.0%
IAU1,000$16,235$36.26$36,260+123.3%1.6%
IGSB500$27,491$55.17$27,585+0.3%1.2%
GOOG
Alphabet (Class C)
300$429,511$87.59$26,278-93.9%1.1%
AAAU1,000$16,948$16.95$16,948+0.0%0.7%
FOR800$14,159$20.18$16,144+14.0%0.7%
eTrade subtotal$2,582,687$2,308,678

Realized results by year

20192020Total
Realized G/L$33k$169k$202k
Dividends$10k$23k$33k

New public investments made: 31, or $5.24m (+28.4% YoY). We were much more active in public markets in 2020, and particularly in public stocks. To my mind this was driven by 1) the falling yields in the bond markets forcing us to look elsewhere for yield, and 2) the happenstance that we listened to the right people and avoided the March/COVID downturn, which demanded that we put on more equity risk to catch the rebound. This was accelerated by the fact that the early Dreamfinders and ValFund money rolled off, and we didn't have any attractive Venture or PE deals in which to place it.

Our bond exposure fell significantly in 2020 as yields collapsed, partially replaced by investments in bond-exposed ETFs; in aggregate, our annualized returns across both classes fell from 2.7% in 2019 to 1.0% in 2020. We started investing in Commodities (again via ETFs), which followed the market up in 2020. Our stock investments did as well, benefiting from our dodge of the COVID downturn—we ended up returning an annualized 42.5% on our equity investments, almost exactly in line with the NASDAQ (41.8%) and in considerable excess of the S&P (15.3%). Our portfolio is about 40% technology stocks.

From May 24, 2019 to Dec 31, 2020, the gross return of the S&P 500 was 31.8% (19.8% annualized); for the NASDAQ, 67.8%/42.1%. Our portfolio slightly underperformed this on an annualized basis, and considerably underperformed on a gross basis. Why? Three reasons: 1) we simply had risk on for a shorter time — on a weighted-average basis, we had risk on 127 days out of the 587 days from our first trades in May 2019 until the end of 2020; 2) public stocks for us in 2019 were both new and a bit of an afterthought; we were far more focused in 2020, and thus saw much better performance; and 3) we're holding a large position in BABA which is underwater.

Source: Nakano_Portfolio_Data.xlsx · Public_Trades / Prices / Account_NAV · daily marks: nakano_reporting daily_marks engine (month-ends tie IBKR PortfolioAnalyst within ±1.1%)
06 · Appendix — expense detail
Consolidated
Line item20162017201820192020202120222023202420252026Total
Office Rent4,17014,77815,06515,39115,85516,63814,64116,0617,327119,925
Office Furniture4,3292,9413,40010,670
Office Supplies0
Office-Related Expenses4,17014,77815,06519,72118,79520,03814,64116,0617,327130,595
Webpage Email3934805781803541925227282,3451,5257,295
Subscriptions13,0978191,5894395,945
Video Meeting Services1581671481541611731841,145
Business Applications2492494413831201,442
Other Business Services2252402149625
Operational Expenses3935015783387706434,2142,0904,6292,29716,452
Client Entertainment8,0448,9702,0152,48821,517
Internal Events4,5063,1058608,471
Business Travel1,1575,4386,595
Client Expenses13,70717,5142,0153,34836,584
Legal Fees2,3768391,4591642785,115
Accountant Fees2,8901,8002,5002,5001,6002,5002,5002,5003,85022,640
State/City Fees751693192782821,122
Bank Service Fees295110175382611512341101,866
Wire Fees2252402901006065425501,455
Foreign Currency Charges20323702244
Advisory and Fees2255,5813,2244,3382,7372,5293,1143,3883,0124,29432,443
Other Expenses2,8811,400991,580
Error7061,1391,316681643844
Miscellaneous2,1752611,316780643736
Creditcard4,7552,3958,1024,0156,12014,3408,4412,1271,0991251,382
Total Expenses5,37312,64728,85623,49428,03136,30850,29539,75926,17317,254268,191
Nakano
Line item20162017201820192020202120222023202420252026Total
Office Rent4,17014,77815,06515,39115,8556,37471,633
Office Furniture4,3292,9413,40010,670
Office Supplies0
Office-Related Expenses4,17014,77815,06519,72118,7959,77482,303
Webpage Email3934805781803541925226782,3451,5257,246
Subscriptions1402393873541,723
Video Meeting Services1581671481541611731841,145
Business Applications2492493362781201,232
Other Business Services225274
Operational Expenses3935015783387706431,4141,5103,5111,76311,419
Client Entertainment3,3233,323
Internal Events2,5254222,946
Business Travel3,3223,322
Client Expenses7993,7432,944
Legal Fees2,3768391,4591641394,976
Accountant Fees2,8901,8002,5002,5001,6002,50013,790
State/City Fees75169319144706
Bank Service Fees2951101753825801802341101,706
Wire Fees2252402901006065980
Foreign Currency Charges203210228
Advisory and Fees2255,5813,2244,3382,7372,5293,0832023425522,187
Other Expenses2,8811,4001,481
Error7061,1391,3162131,096
Miscellaneous2,1752611,316213384
Creditcard4,7552,3958,1024,0156,12014,3408,4412,1271,0991251,382
Total Expenses5,37312,64728,85623,49428,03136,30821,9147,3594,6312,006170,620
Centerpitch
Line item20162017201820192020202120222023202420252026Total
Office Rent10,26414,64116,0617,32748,292
Office Furniture0
Office Supplies0
Office-Related Expenses10,26414,64116,0617,32748,292
Webpage Email5050
Subscriptions2,6954267163854,222
Video Meeting Services0
Business Applications105105210
Other Business Services402149551
Operational Expenses2,8005801,1185345,032
Client Entertainment11,3688,9702,0152,48824,841
Internal Events1,9822,6848605,525
Business Travel1,1572,1173,274
Client Expenses14,50613,7712,0153,34833,640
Legal Fees139139
Accountant Fees2,5002,5003,8508,850
State/City Fees278139416
Bank Service Fees31129160
Wire Fees42550475
Foreign Currency Charges216216
Advisory and Fees313,4082,7784,03910,256
Other Expenses9999
Error681429252
Miscellaneous780429351
Creditcard0
Total Expenses28,38132,40021,54215,24797,571
Sources: Nakano_Summary_CASH_EXPENSE REPORT_(2026_06_30) DRAFT.xlsx · Nakano_Portfolio_Data.xlsx · unmarked private deals carried at zero.