As a company that proudly puts investors first, Yieldstreet took stock of investor feedback requesting more frequent updates and better insights into the status of investments that are no longer performing in line with initial projections. Financial products have inherent risks, and while we strive to select what we believe to be the best opportunities for our members, some of them may still not achieve the expected results.
In an effort to improve investor communication, in 2021 we started providing monthly updates, and more recently, we launched a new performance classification, as we believe a clearer terminology can provide additional guidance and context to investors attempting to navigate the complexity of investment performance.
The most current classification is available in detail below:
An investment is classified as “Performing” when it is performing in line with initial expectations.
An investment is classified as “Modified Outlook” when it is not performing according to initial expectations. For example, it may be past the targeted maturity date or there may be a missed interest payment.
Should an investment fall into the Modified Outlook category, it will also be included in a sub-category to provide investors with additional information on our workout strategy, and whether a resolution is expected in a period shorter or longer than one year.
The subcategories are:
“Heightened Supervision,” which points to increased monitoring of the investment to address potential underperformance concerns.
“Workout,” which signals that Yieldstreet is actively negotiating with key stakeholders, such as borrowers, counsels, and originators to address performance issues. Investors can find an example of a successful workout process here.
“Litigation,” when an in-court dispute resolution process, such as actions on guarantees, indemnities, or insurance has been initiated.
“Collections,” which means that collection efforts have started. These efforts could occur before, during or after formal proceedings and might involve a liquidation strategy for the assets supporting the underlying investment.
“Restructured,” when an underlying investment is converted. For example, when a borrower defaults on its debt, it can agree with the lender that the loan (debt) is converted into a stake (equity) in a company or in an underlying asset (such as real estate).
“Foreclosure,” which defines the legal process through which a party takes possession of the underlying collateral and facilitates a sale, subject to either judicial or non-judicial state processes.
It is worth reminding that in the interim of the recovery process, interest will contractually continue to accrue and investors will be legally entitled to it even as their portfolios may no longer show its accumulation.
Investors can expect to receive an email informing them that monthly updates have been posted to accounts on the last business day of each month, should an investment be included into the above mentioned categories. As the recovery process can take time, investors should not be concerned about the lack of new developments in each monthly update. Once posted, updates can be found in the ‘Activity’ section of Investor Portfolios.
Yieldstreet’s mission is to cater to investors first and foremost, and all of our actions are aimed at helping them reach their wealth and income goals – including when we work on maximizing the recovery rate from investments that did not perform as expected.
Please reach out to us if you have questions about these definitions, or your portfolio. You can contact us through the chat on the Yieldstreet website, or by sending us an email to [email protected]
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.