Forbes: How You Can Put Your Money In Asset-Based Investments

July 9, 20185 min read
Forbes: How You Can Put Your Money In Asset-Based Investments
Share on facebookShare on TwitterShare on Linkedin

Have you ever thought that there had to be a better way of doing something? You look at a situation and just know deep down that things need to change.

For Milind Mehere, that moment came when he was, in his words, “overexposed to the stock market.” Mehere “wanted to diversify and invest in asset classes like real estate or commercial businesses with strong cash flow to create a passive income stream.”

However, “there wasn’t an easy and trustworthy way to participate in such investments, typically made by large [private equity] firms or hedge funds,” he says. “So, I was locked out and stuck.”

That scenario wasn’t good enough for the tech entrepreneur. After all, you may recognize Mehere as the cofounder of Yodle, who helped grow the online marketing company to over $200 million in revenue until it was acquired for $342 million by Web.com in 2016.

Today, he’s tackling the alternative investment space along with Michael Weisz and Dennis Shields. Being “veterans of the specialty finance industry,” Weisz and Shields “saw several inefficiencies in the fragmented hedge fund and [private equity] space,” explains Mehere.

Together, the trio founded Yieldstreet in 2015 as a way “to provide accredited investors access to asset based investments that were previously unavailable,” says Mehere. Yieldstreet allows “investors to participate at minimums as low as $10,000 and earn target yields of 8-20%.”

I asked Mehere what type of investments YieldStreet offers and how we can all get involved. Fortunately, for those seeking alternative investment ideas, you will have plenty of opportunities. Let’s take a look at what you can do with YieldStreet.

A wide variety of investments — backed by collateral

Diversifying your portfolio is, at this point, a cliche in the world of finance. Well, if diversification is what you’re looking for, YieldStreet is the place to be.

“We have a wide variety of investments which have included financing a manufacturing plant, portfolios of pre-settlement legal cases, real estate debt (residential, commercial and mixed use), loans to law firms, nursing home financing, triple net retail leases, etc.,” says Mehere.

Furthermore, your investments are backed by the asset, so you as the investor are more protected. With “traditional equity market based investment vehicles like your brokerage account or 401(k), where if there is a market correction or drawdown, the value of your investments simply decreases,” explains Mehere. However, “YieldStreet investments are backed by collateral and are debt-based so they pay a fixed interest rate during the duration of the investments.”

That’s not all. If a default were to occur, Mehere says YieldStreet investors “have recourse and legal options to recover principal and often owed interest as well due to the collateral that backs the investment.” For example, in the event of a “default in real estate investment, you can liquidate the investment and try to collect your principal and interest.”

So, what can you invest in?

Now that you understand some of the benefits, let’s explore one of the actual investments YieldStreet offers. One investment option that caught my eye was litigation finance. So, I asked Mehere to provide a more in-depth look at this asset class.

“Litigation finance is an interesting asset class,” says Mehere. “There are several types of litigation finance, including pre-settlement advances, post-settlement advances and law firm loans. To date, we have had offerings in all of these categories, but most commonly offer portfolios of pre-settlement advances.”

So, how does the pre-settlement advance work and how do you make money? “Pre-settlement advances help fund the daily life expenses of a plaintiff while they await the settlement of a legal claim,” Mehere explained. “This cash advance, provided by a Pre-Settlement Advance Company (PAC) is typically used by the plaintiff to cover rent, mortgage, food, tuition or health care expenses.”

What I found particularly interesting is that YieldStreet “will build a diversified portfolio of often a few hundred different advances based on historical data and variables such as case type, law firm, geography, and others,” as Mehere told me. “Typically advances included in a YieldStreet portfolio have been active for six months or more. Payments to YieldStreet investors occur as cases within the portfolio settle.”

Who are alternative investments right for?

Mehere suggests that any one of us can benefit from these types of investments. As he stated, we like to think of the investing journey as one that moves from spending/borrowing (think student loans, car, buying a house), to financial planning (stocks, ETFs, insurance etc.), to finally wealth creation (Real estate assets, income generating product such as YieldStreet).”

Now, for somebody like me with a wife and two children, I could see YieldStreet-type investments potentially working for us. Frankly, Mehere makes a compelling case.

“YieldStreet can give [your] family peace-of-mind that a portion of their investment portfolio operates independently of the stock market,” he says. “It can also add a certain level of predictability to [your] cash flows, as several of our offerings, especially in real estate, will make scheduled monthly interest payments to investors, and most investments make at least quarterly distributions.”

Additionally, Mehere’s company offers YieldStreet University, which it touts as based on a “‘Khan Academy meets Investopedia meets Ted Talks’ style environment.” Mehere explained that with “a significant number of our investors [being] new to the asset classes we offer, we think it is essential to provide resources and information that allow them to make an informed decision, and understand what they are investing in.”

Look, it’s difficult to know with 100% certainty where to put your money. By definition, investing is risky. But, at least with YieldStreet you have another option.

I’d say consider what they have to offer and see if it fits with your risk tolerance. “If you can’t explain the investment to your mom, don’t do it. Also, before you invest, try to understand what happens when the glass breaks,” Mehere advises. “What is the collateral that is generating the cash flow and how strong is that collateral? You don’t need to be an expert in alternatives but simply take some time to understand the asset class and the investment offering.”

You could even try to get your first $10,000 together for the minimum investment by working another job, starting a side business, or selling some things around the house. This way you’re not exposing the income from your job.

Either way, you need to put you and your family on the way to wealth. You now have another tool in your toolbox with YieldStreet. As Mehere boasts, “… we are changing the way wealth is created.” Decide for yourself whether or not you want a part of the action.

Read the full article on Forbes.

We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetalternativeincomefund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

9 Statistics as of the most recent month end.

300 Park Avenue 15th Floor, New York, NY 10022

844-943-5378

No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice, except for specific investment advice that may be provided by YieldStreet Management, LLC pursuant to a written advisory agreement between such entity and the recipient. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and are willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

YieldStreet Inc. is the direct owner of Yieldstreet Management, LLC, which is an SEC-registered investment adviser that manages the Yieldstreet funds and provides investment advice to the Yieldstreet funds, and in certain cases, to retail investors. RealCadre LLC is also indirectly owned by Yieldstreet Inc. RealCadre LLC is a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Information on all FINRA registered broker-dealers can be found on FINRA’s BrokerCheck. Despite its affiliation with Yieldstreet Management, LLC, RealCadre LLC has no role in the investment advisory services received by YieldStreet clients or the management or distribution of the Yieldstreet funds or other securities offered on our through Yieldstreet and its personnel. RealCadre LLC does not solicit, sell, recommend, or place interests in the Yieldstreet funds.

Yieldstreet is not a bank. Certain services are offered through Synapse Financial Technologies, Inc. and its affiliates (collectively, “Synapse”) as well as certain third-party financial services partners. Synapse is not a bank and is not affiliated with Yieldstreet. Bank accounts are established by Evolve Bank & Trust. Brokerage accounts and cash management programs are provided through Synapse Brokerage LLC (“Synapse Brokerage”), an SEC-registered broker-dealer and member of FINRA and SIPC. Additional information about Synapse Brokerage can be found on FINRA’s BrokerCheck. By participating in a Synapse cash management program, you acknowledge receipt of and accept Synapse’s Terms of Service, Privacy Policy, and the applicable disclosures and agreements available in Synapse’s Disclosure Library.

Investment advisory services are only provided to clients of YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission, pursuant to a written advisory agreement.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure