Active investment performance monitoring at Yieldstreet

November 11, 20222 min read
Active investment performance monitoring at Yieldstreet
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This article follows Due Diligence At Yieldstreet, covering investment monitoring post investment close. 

Key takeaways

  • After an investment closes, there is continuous monitoring of each individual investment’s health through a cross functional effort including both first line asset class teams and second line support functions to monitor performance.
  • Quarterly updates are provided on performing investments and monthly communications are provided on modified outlook investments.
  • Investment performance is ultimately quantified by an net annualized return measure, which is a time-dependent return calculation over the life of the investment.

Once an investment is approved by our investment committee and offered on the platform, it enters our portfolio management protocol to help ensure the best possible outcome for investors. Explore the three key steps that happen behind the scenes for each investment.  

Onboarding and performance monitoring 

Once an investment is active, it will generally be onboarded into our risk management system to facilitate real time compliance monitoring of the underlying investment, which includes covenant tracking, budget to actuals reconciliation, and price level assessment. Our internal risk reporting team provides a holistic portfolio view of Yieldstreet’s investments, while enabling drill down capabilities to assess underlying asset class or industry performance.

In addition to monitoring in real time, our Portfolio and Risk Management team partners with each asset class team to conduct a quarterly performance tiering analysis, where each individual investment is reviewed with members of the Investment Committee, including trend analyses as well as any recommendation of action required. 

A component of this quarterly review is assigning a performance rating score, which is used to qualify investments between Performing and Modified Outlook status on the platform. Please see our Communications Policy for additional information related to investment classifications. 

Investment updates

We are focused on providing investors timely and relevant updates related to their investments. This is completed through a quarterly process for most asset classes for performing deals, with Quarterly Updates on Investment Performance highlighting key takeaways for individual investment performance over the prior quarter. 

For modified outlook investments, update cadence is increased to monthly to ensure comprehensive updates are made available.

Investment payments and resolution

As investments are active in investor’s portfolios, our Operations team processes all payments from counterparties and distributes proceeds to investors. Once an investment reaches resolution, through maturity or asset sale, final proceeds are processed and a net annualized return measure is calculated as a time dependent return calculation over the life of the investment. Once an investment is realized, and a net annualized return produced, it will be updated on the our Platform Wide Performance page.