How the Alternative Income Fund Addresses Alternative Investments Challenges

March 13, 20245 min read
How the Alternative Income Fund Addresses Alternative Investments Challenges
Share on facebookShare on TwitterShare on Linkedin

A core investing tenet is that the reward of any given investment should be commensurate with the risk taken. If a given investment offers an outsized reward, investors will eventually bid it up so that the reward decreases, or the risk will become more evident over time. 

Alternative investments – investments that go beyond traditional investing in stocks, bonds, mutual funds, or ETFs – offer the potential of higher returns and benefits such as returns typically uncorrelated with the stock market. Investors can expect, of course, that those returns come with commensurate risks and trade-offs. It’s worth understanding the nature of those risks to understand whether alternatives can bolster your portfolio, improve your risk/return profile, and potentially offer long-term passive income. Here are three of the most common issues investors face when seeking diversified returns through alternative investments, and how the Yieldstreet Alternative Income Fund addresses those concerns.  

No access & limited opportunity

Access is often the first hurdle to alternatives. In a recent episode of The Yield, Jim Jessee pointed out that in “the traditional alternative space, you need a net worth of at least a million dollars, annual income of $200,000 to $300,000,” to participate, in other words, you need to be an accredited investor. Accreditation can be prohibitive to many investors, which is a shame because, as Bill Reigel stated earlier in that podcast, alternatives “should be able to deliver a real return above public equities of between…2% to as much as 6% or 8% on the highest side.” 

The discussion on this episode of The Yield was about the Fund, which is open to all investors, with a minimum investment of $10000 (Riegel and Jessee, along with the third guest, John Siciliano, serve on the board of the Fund). By lowering the barrier to entry and offering access to alternative investment through a fund instead of requiring investors to find individual alternative investments, the Alternative Income Fund addresses this access issue head on. While other crowdfunding platforms list deals and opportunities in a single asset class like real estate or art, the Yieldstreet Alternative Income Fund offers diversification across multiple asset classes with a $10000 minimum. 

Lacking liquidity

A second risk involved with alternatives is liquidity, or lack thereof. Investing in the stock market gives one the ability to trade in and out of their stocks, and thus the ability to take their money out of the stock market, at any time. Investors value this free access to their assets, and thus expect a liquidity premium when they invest in assets that are less liquid. 

Alternatives, which may include real estate, commercial loans, art, and legal finance, among other categories, do not always offer this on-demand access. There are potential positives to this illiquidity as investors often trade in and out of their liquid assets too frequently, which could negatively impact their returns. Warren Buffett has famously said that he buys on the assumption “that they could close the market the next day and not reopen it for five years.”

However, Yieldstreet does recognize and understand that investors do require some flexibility, and continues to demonstrate that alternative investments do not necessarily need decade-long durations to generate returns. The Fund is the first ‘40 Act Fund available to non-accredited and accredited investors alike that offers some regular liquidity. Without impacting the underlying operations of the Fund, investors can now tender a portion of their holding for buy-back each quarter if they have a more urgent need for capital.  

The volatility issue

Related to liquidity is pricing. Again, we’re conditioned as investors to expect an up-to-date price for all our investments; with newer classes like cryptocurrencies, that pricing continues 24/7 without even a weekend pause. 

Alternatives don’t work that way. There is no up-to-the-minute exchange to track the price of a piece of art or a real estate investment. The Fund again offers an example of the nuances around the pricing of its Net Asset Value (NAV). Much of the Fund is in investments like art or real estate or loans that get re-priced once a quarter, and even then, relatively conservatively, as Siciliano points out on The Yield. But a portion of the Fund is invested in instruments such as preferred stocks, which are more liquid and offer a yield for the ‘cash’ portion of the Fund, but whose price does change on a daily basis. So the regular movements of the NAV don’t reflect the underlying value of much of the portfolio, which is updated less frequently. 

Investors in alternatives need to practice patience in waiting for the value of their investments to appreciate over the long term, and need to be prepared that the day-to-day information flow around that progress will be different than it is for stocks and bonds. 

No free lunch, but opportunities all the same

It’s true that there’s no free lunch in investing. Alternatives can offer investors potentially higher returns and uncorrelated diversification from their traditional bond and equity investments to protect their investment in the event of a market downturn. While investors have expressed legitimate fears about liquidity, further diversification across alternative asset classes, and high minimums, modern investment products like the Yieldstreet Fund are designed to assuage those concerns and help modern investors achieve returns outside of the stock market. 

If you’re interested in alternatives after learning about these opportunities and trade-offs, you may want to learn more about the Fund. It’s designed to address the issue of access directly, and if you’re attuned to the liquidity and pricing issues, it may be of interest for your portfolio. Learn more about the Yieldstreet Alternative Income Fund.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to 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.  

The securities described in the prospectus are not offered for sale in the states of Nebraska or North Dakota or to persons resident or located in such states. No subscription for the sale of Fund shares will be accepted from any person resident or located in Nebraska or North Dakota.

Related Content

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 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


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 Plaid, and Footprint and none of such entities is affiliated with Yieldstreet. By using the services offered by any of these entities you acknowledge and accept their respective disclosures and agreements, as applicable.

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