Yieldstreet Portfolio Snapshot: Q4 2022
As of 4Q22, the total invested on Yieldstreet increased $233M or 7.8% since 3Q22, surpassing $3.2B since our inception in 2015. This increase was achieved, in part, through offering 25 new investments to Yieldstreet’s base of more than 400K members. We had 19 investments mature over the quarter, including 8 investments with a weighted average net annualized return of 7.7%, excluding 11 Short Term Notes1.
Our most popular new investments this quarter included several supply chain financing offerings, which offer the opportunity for target returns in excess of 10%2 with expected 6 month terms, in addition to a real estate multi-family equity opportunity to invest in three pre-war properties located in the Chelsea neighborhood of NYC.
For current available investment opportunities, see our investments page.
Portfolio composition
The total amount invested on platform increased 7.8% quarter-over-quarter, up 49% year-over-year.
The increase in total amount invested spanned asset classes. We saw high demand for shorter duration yielding products, in addition to structured note offerings (included within “Other”) which offer equity market exposure, with downside protection features.
As of 4Q22, Real Estate remains the largest asset class on our platform, making up 25% of total active invested amounts, followed by Private Credit (16%), and Other (10%) which includes Structured Notes.
Portfolio performance
As of 4Q22, Yieldstreet has realized 196 matured investments inception to date over seven asset classes, leading to an inception-to-date weighted average net annualized return of 9.7%, excluding Short Term Notes1.
In total, Yieldstreet has realized returns on 260 investments inception to date.
In 4Q22, Yieldstreet realized returns on 8 investments, with a weighted average net annualized return of 7.7% excluding Short Term Notes1 (Note: The returns for 11 individual Short Term Note offerings are averaged in the chart below for presentation purposes).
Residential Real Estate Property I (-0.7% net annualized return1) represented the resolution on a legacy real estate loan, which had been in default since April of 2019. Through a sale of the outstanding debt to a third party, Yieldstreet was able to realize an all-in recovery rate of 96% on invested capital, including previous interest distributions.
Although we strive to deliver target returns on every Yieldstreet offering, we consider this recovery to be a strong outcome given the challenges presented by this offering.
In addition, Midwest Student Housing Refinancing (8.0% net annualized return1) represented a transaction which had been downgraded to Modified Outlook status (not performing according to initial expectations) in the third quarter of 2022 subsequent to required extensions beyond the contractual term of the loan. Through active asset management in partnership with the Originator, the investment achieved its targeted return with a full payoff in December of 2022.
Investment level inception to date returns are available on the Yieldstreet Platform-Wide Performance page.
Yieldstreet’s portfolio as a whole continues to show resilience in the wake of broader market and interest rate volatility. Yieldstreet investments within “Modified Outlook” status make up 4% of the total raised investment dollars, while Marine Default and Realized Loss make up 2.4% and 0.4%, respectively.
Disclosures
Past performance is not indicative of future results.
Source: Yieldstreet (unless otherwise noted). All data presented in this communication is dated as of December 31, 2022. Please note any leverage used is not included in the Asset Class by Dollars Invested data.
1 The net annualized return represents a historical average net realized return, using an internal rate of return (IRR) methodology, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC after deduction of management fees and all other expenses charged to investments. The net annualized return for 4Q2022 is from October 1, 2022 through and including December 31, 2022. The net annualized return since inception is from July 1, 2015 through and including December 31, 2022.
2 “Target Returns” represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. 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, modeling error, or other reasons. Gross targets do not reflect the impact that the deduction of advisory fees and other expenses would have on returns.
3 “Target Term” represents the estimated term of the fund; 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.
4 Source: Harbor Group International. Realized investments since 1998. Performance information is provided for illustrative purposes only and no representations or warranty is made by HGI as to the accuracy or completeness of the information contained herein. Net IRR is net of all fees and expenses charged at the asset level and are calculated with respect to the highest fee-paying investor in the relevant investment. The consolidated/weighted returns shown above do not reflect results of any individual investors and instead represent a blended composite of all HGI dispositions of realized assets initially purchased in the applicable year and are calculated with respect to the highest fee-paying investor in the relevant investment. As a result such performance is hypothetical in nature and has inherent risks and limitations. Prospective investors should not place undue reliance on any such hypothetical information.
Our Statistics page includes additional context and performance data. For any further questions, please contact us at [email protected].
Marine Default refers to the outstanding defaulted investment offerings that were originated by GMTC. Yieldstreet continues to press forward on its pursuit to collect on the $85M final judgment entered by the High Court of England in favor of the YS SPV against the Borrowers through several multi-jurisdictional and multi-pronged recovery strategies. These recovery strategies include, but are not limited to: enforcement of the High Court judgment in the UK to pursue the Guarantor’s real property; global asset tracing; litigation against the originator; and pursuit of a Mortgagees Interest Insurance Claim covering the underlying vessels.
Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.
This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor 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. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness, or any other aspect of such websites (or articles contained therein).
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Yieldstreet provides access to alternative investments previously reserved only for institutions and the ultra-wealthy. Our mission is to help millions of people generate $3 billion of income outside the traditional public markets by 2025. We are committed to making financial products more inclusive by creating a modern investment portfolio.
2 Represents an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]