As your investment is progressing, there are a few important things to keep in mind. While Yieldstreet offers investments that ideally will perform in-line with expectations, it is important to note that not all investments will perform as anticipated. Yieldstreet expects that some loans will indeed experience defaults, and the risk of default is generally greater with loans that target higher-yield returns from borrowers who may not be able to obtain more traditional bank financing. In alternative lending, it is therefore particularly important for lenders to protect against potential default scenarios in order to mitigate risk where possible and maximize potential recoverability where necessary. We work to do exactly that, so that when defaults do occur, our investors can trust in our ability to act swiftly and in their best interest to minimize losses — and, where possible, return principal.
Past investment performance, as we all know, is no indicator of future performance. That is as true with a lender’s past performance managing defaulted loans as it is reporting returns from loans that are repaid according to expectations. Since inception in April of 2015, Yieldstreet has funded over $1 billion across 170+ investment offerings.
Like any investment, offerings on Yieldstreet carry risk, which should be evaluated on a case-by-case basis. Prospective investors are expected to read the stated risk factors for each offering. While we seek to minimize risk by evaluating opportunities before proceeding to an offering – often in consultation with outside partners and advisers, and from there by requiring the collateral by which our investments are backed — all investments carry a certain level of risk. Those risks are set forth in detail in the offering documents and we urge investors to take them to heart.
As of the close of Q1, we are aggressively addressing 14* defaulted offerings (involving 10 borrowers). Each situation varies in complexity and timing. However, in all instances, we are working tirelessly to help us achieve a favorable outcome.
In the first instance, we look for opportunities to work with borrowers who cannot meet their obligations in accordance with the stated loan terms. We seek to understand the circumstances they are facing, and to negotiate accommodations that may increase their ability to repay the loan. Extended payment terms sometimes make the difference. The target maturity date listed on Yieldstreet offering documents is inclusive of any extensions of the loan term that may be available. It is thus our expectation that the investment will mature within the target duration, but it is also possible that the Borrower may pay back a loan sooner or much later than the stated maturity.
Should a formal default occur, Yieldstreet, as the Manager of each investment, remains committed to acting in the investors’ best interest in all instances and will work diligently where appropriate with our asset managers, advisers and industry contacts, toward a resolution. Depending on the particular situation, the workout, restructuring, forbearance and/or legal proceedings, can take time – this is often a sequential process, and can be a protracted one. It’s important to note there may be months of limited information to share with investors until there is a clear path forward with the intention of maximum principal recovery.
However long the process takes, Yieldstreet will actively pursue our rights on behalf of investors. Depending on the circumstances, we may find it best to work with the Borrower toward a resolution. Or, after assessing the situation with our origination partner, we may find it to be most prudent to take a more aggressive approach. You can refer to our default loan process for a detailed look at how we assess default scenarios. Regardless of the work-out strategy, our investors can rely on us to act in their best interest at all times and to provide updates along the way. Updates may vary in substance as it may take time for the situation to unfold and for us to gain clarity.
Investors can expect an update for each investment they have participated in on a quarterly basis. To manage expectations, updates typically go out within 60 days after quarter-end.
Starting on April 30, 2020, we will send monthly updates to all investors in defaulted offerings. If we do not have any meaningful update from the prior month – which may often be the case – we will say so and provide our best current estimate when we expect to learn more.
Please reach out to [email protected] with any questions.
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.
2 Represents a net estimated, unrealized annualized internal rate of return (IRR) of your portfolio and is based by reference to the effective distribution dates and amounts to and from the investments, as well as any outstanding principal and accrued and unpaid interest as of the current date, after deduction of management fees and all other expenses charged to the investments.[read more]
3 "Annual interest" represents an annual target rate of interest and "term" represents the estimated term of the investment. Such target returns and estimated term are projections of the returns or term and may ultimately not be achieved. Actual returns and term may be materially different from such projections. These targeted returns and estimated term are based on the underlying agreement between the SPV and borrower or originator, as applicable.
4 Reflects the initial quarterly distribution declared by the board of directors on February 6, 2020, which will be payable to stockholders of record as of June 10, 2020, and the initial offering price of $10 per share.
5 The Fund will cease investing and seek to liquidate the Fund's remaining portfolio no later than 48 months after the Fund's initial closing. It may take up to twelve months thereafter to fully monetize any remaining illiquid investments in the Fund's portfolio.
6 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.
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. 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 therefor.
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 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.
Banking services are provided by Evolve Bank & Trust, Member FDIC.
Investment advisory services are provided by YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission.