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What to Expect After a Legal Finance Offering

July 17, 2018 • 2 min read

Over the lifetime of a Legal Finance investment, you may see money flowing back into your account not only in different dollar amounts but also at varying time intervals. As a point of reference, the day after your investment is marked active in your portfolio, it begins earning interest on a daily basis.

Legal finance offerings, sometimes referred to as litigation finance, typically have event-based payment schedules, meaning that investors receive payments following an event, or when individual cases within the underlying portfolio settle or are adjudicated. This is also called a “settlement event.” Those payment dates and amounts cannot be pre-determined because when the cases will settle, or been adjudicated, is unknown ahead of time.

Investors can expect to receive several different payments throughout the targeted length of the investment. Further, when an individual case within a portfolio settles, if the amount to be distributed to investors is greater than the total current interest outstanding, all outstanding interest will be distributed and a portion of outstanding principal will also be repaid.

It is important to note that even after some principal is returned, the remaining principal will continue to earn interest at the target annual yield. On the other hand, if the amount to be distributed from the settled case is less than the total current outstanding interest, then the distribution will go towards accrued interest only and the return of principal will occur at a later date.

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² Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]

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.

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