Our in-depth review compiles crucial details to help you assess whether Yieldstreet is legit, ensuring you make informed investment decisions.
What is Yieldstreet and how does it work?
Yieldstreet is an investment platform designed to provide access to alternative market investments. This platform allows individuals to explore and invest in a wide variety of asset classes that are typically less accessible to the average investor, aiming to generate income, grow portfolio value, or achieve a combination of both.
The process of investing through Yieldstreet involves three main steps:
1. Exploring Investment Opportunities: Yieldstreet offers a broad range of alternative asset classes, claiming to have the widest variety available on any platform. These investments are presented alongside opportunities to access institutional-quality investments without the associated high costs, managed by top-tier investment managers.
2. Investing: Yieldstreet emphasizes the thorough vetting of its investments, which undergo a four-step due diligence process. The platform also provides comprehensive information about past performance metrics and the background of its partners, aiming to equip investors with all necessary details to make informed decisions. Furthermore, Yieldstreet supports its investors with a dedicated investor relations team available for queries.
3. Tracking Performance and Earnings: The investments on Yieldstreet typically offer regular income, growth at maturity, or both. Investors can track their investment performance and receive regular updates and quick payments of returns through the FDIC-insured Yieldstreet Wallet. Additionally, the platform offers the option to reinvest returns into new opportunities.
Behind the scenes, Yieldstreet’s investment team conducts extensive analysis and curation of investment opportunities. This includes partnerships with third-party managers and experienced originators to provide access to opportunities often reserved for institutional investors. Each potential investment undergoes a rigorous, holistic due diligence review by dedicated teams and independent committees to identify and mitigate potential risks. Moreover, Yieldstreet's experienced Portfolio & Risk Management Team continuously monitors investments, ensuring regular updates and performance tracking for investors via the Yieldstreet app.
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How risky is Yieldstreet?
3/5
— Moderate RiskInvestments on Yieldstreet, particularly in the high-yield, specialty-lending market, carry inherent risks higher than those found in more traditional debt and equity investments. These risks are extensively detailed in the offering documents for each investment, often relating to the borrower's capacity to repay the loan as agreed. Yieldstreet attempts to mitigate these risks through measures like collateral-backed financings and, in some cases, personal guarantees, as outlined in each investment's offering documents.
Despite these efforts, it's crucial for investors to understand that risk cannot be entirely eliminated. A common risk involves the possibility of a borrower failing to repay their loan or meet their contractual obligations. Yieldstreet and its originators employ various risk mitigators, such as insurance and personal guarantees, and seek legal opinions on the business and collateral status to potentially reduce, but not eliminate, the downside risk.
How liquid is Yieldstreet?
1/5
— Minimum LiquidityThe liquidity on Yieldstreet, referring to how easily investments can be converted to cash, varies by the nature of the alternative investments it offers.
Generally, alternative investments are less liquid than traditional stocks or bonds, meaning they cannot be quickly sold or exchanged for cash without potentially incurring a significant loss in value.
Yieldstreet's offerings primarily consist of private market alternatives, which typically have longer holding periods and are not traded on public markets, further affecting their liquidity. Investors should consider the longer time horizon and reduced liquidity as part of their investment decision when engaging with Yieldstreet's platform.
How volatile is Yieldstreet?
3/5
— Moderate VolatilityThe assets available on Yieldstreet, being alternative investments, generally exhibit different volatility patterns compared to traditional stock and bond markets.
These alternatives, including real estate, legal finance, and art finance, among others, may not directly correlate with the ups and downs of public markets, potentially offering a buffer against broad market volatility.
However, the specific volatility of each asset class can vary, influenced by market demand, economic factors, and the inherent risks of the investment itself. Investors should be aware that while some alternative assets might offer lower volatility in comparison to traditional markets, they still carry their own unique risks and potential for price fluctuations based on their specific market dynamics.
What is the average rate of return for Yieldstreet?
9.6 %
— Moderate ReturnInvestors on Yieldstreet can expect a net annualized return (IRR) of 9.6%.
What is the minimum investment amount for Yieldstreet?
$10,000
The minimum investment amount on Yieldstreet starts at $10,000. However, it is important to note that many investment opportunities on the platform have minimum investment requirements that range between $10,000 and $20,000.
What is the investment time horizon for Yieldstreet?
6+ months
The investment offerings on Yieldstreet range from short-term durations of 6 months to longer-term options extending up to 5 years.
Who can invest in Yieldstreet?
United States
Yieldstreet is open to investments from U.S. persons only. This includes U.S. citizens, U.S. permanent residents, or entities formed in the U.S. that have U.S. owner(s).
To create an account, individuals are required to have a valid Taxpayer Identification Number (TIN), which could be an Employer Identification Number (EIN) or Social Security Number (SSN). Additionally, a U.S. bank account and a U.S. mailing address are necessary for account setup.
For investment in the Yieldstreet Alternative Income Fund, non-accredited investors are welcome without the need for accreditation verification. However, investing in single asset class offerings on Yieldstreet requires investors to verify their accredited status. This process involves submitting documentation that proves compliance with the U.S. Securities and Exchange Commission (SEC) requirements for accredited investors.
Is Yieldstreet regulated or audited?
SEC Regulated
Yieldstreet operates within a regulatory framework to ensure compliance and investor protection. The platform's activities are subject to regulations by various financial and securities authorities. As part of its commitment to transparency and regulatory compliance, Yieldstreet undergoes regular audits and reviews.
Additionally, Yieldstreet's partnership with Synapse Brokerage LLC, an SEC-registered broker-dealer and member of FINRA and SIPC, plays a crucial role in its regulatory compliance. This partnership ensures that Yieldstreet adheres to the stringent regulations and standards set forth by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the Securities Investor Protection Corporation (SIPC).
These regulatory bodies oversee and enforce the rules governing the securities industry in the United States, providing an extra layer of security and trust for investors on the Yieldstreet platform.
Is Yieldstreet insured?
Yes
Yieldstreet provides insurance for funds held in the Yieldstreet Wallet.
Deposits up to $250,000 are covered by standard FDIC insurance. For deposits ranging from $250,001 to $1 million, Yieldstreet spreads the funds across multiple FDIC-insured banks to ensure full coverage up to the maximum allowed.
It's important to note that Yieldstreet itself is not a bank. Certain services are facilitated through a partnership with Synapse Brokerage LLC, an SEC-registered broker-dealer and member of both FINRA and SIPC, to provide additional regulatory oversight and protection.
Does Yieldstreet distribute payouts?
Dividends
Investors on Yieldstreet can receive dividends or interest payments in several ways, depending on the specific offering they invest in. Here’s a general overview:
1. Fixed Income Investments: For some offerings, like notes with a 6-month term, investors are targeted to receive monthly interest payments at a fixed target net annualized yield on the full investment amount, with the principal expected to be repaid at maturity.
2. Diversified Portfolio Investments: In offerings like the Short Term Income Notes Diversified Portfolio XLV, investors can expect a target net annualized yield paid quarterly. This portfolio invests in individual income notes, each with different characteristics like yield, downside protection, and strike price. Returns are calculated based on the weighted performance of each structured note, typically with a term of 250 days.
3. Art Investment: For investments in art, returns and principal are anticipated through the appreciation in value of the artwork at the time of its sale, expected within five years. Cash flows from artwork sales are used first to cover management and other fees, then to return capital contributions to investors. Subsequently, investors receive up to a 15% annualized net return on invested capital, with any additional proceeds split between investors (85%) and the Manager (15%).
Each investment type on Yieldstreet has its own structure for dividends or interest payments, reflecting the diversity of assets and investment strategies available on the platform.
How do I get my money back from Yieldstreet?
Investors on Yieldstreet receive their money back through distributions deposited into their Yieldstreet Wallet. These funds can then be withdrawn to an external bank account at any time.
For those invested in specific funds like the Yieldstreet Alternative Income Fund or the Growth & Income REIT, there is an option to enroll in the Distribution Reinvestment Plan (DRIP). This program automatically reinvests distributions back into the investment, adding to the initial principal, instead of paying out.
For investments through an Equity Trust IRA, distributions are automatically wired back to the investor's account at Equity Trust, as IRAs do not have a Yieldstreet Wallet.
What are the annual fees for Yieldstreet?
Yieldstreet charges a range of fees depending on the investment type and stage of the process, all of which are intended to be transparent and are disclosed on the individual offering pages.
1. Management Fees: These vary across offerings, from 0% for the short-term notes program up to 2.5% annually, deducted from the cash flows of the offerings. The net target return advertised for all offerings on Yieldstreet is net of these management fees.
2. Excess Returns: In addition to management fees, Yieldstreet may also collect a portion of the excess returns shared with investors, with specifics disclosed on each offering page.
For structured notes, there is a 1.25% annual management fee. Initial coupon payments are applied towards a $150 annual fund expense.
The Yieldstreet Alternative Income Fund involves:
- An Annual Management Fee of 1.0%, calculated on the average of the fund’s net assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters.
- A Maximum Annual Administrative Expense of 0.5%, covering the costs and expenses incurred by the fund’s administrator in providing necessary services for the fund to operate.
It is important to note that management fees or administrative expenses are not charged on parts of the assets held in cash or cash equivalents, such as money market funds. For example, if 80% of the net assets in the Yieldstreet Alternative Income Fund are invested, then only 80% of your investment incurs these fees.
How do I handle my investments in Yieldstreet?
On Yieldstreet, investors have the ability to manage their assets through a variety of tools and features designed for portfolio oversight and decision-making. Investors can track the performance of their investments, receive regular updates, and view detailed information about each investment's progress. The platform allows for the monitoring of earnings and performance metrics, enabling investors to make informed decisions about their portfolios.
Additionally, Yieldstreet provides the option to reinvest earnings from maturing investments directly into new opportunities, facilitating portfolio growth and diversification. Through the Yieldstreet Wallet, returns are readily accessible, and investors can manage their funds, deciding whether to reinvest or withdraw.
The platform's user-friendly interface and dedicated support from the investor relations team further enhance the asset management experience, ensuring investors have the resources and information needed to effectively manage their investments on Yieldstreet.
How does Yieldstreet get taxed?
Yieldstreet provides tax reporting support to its investors by issuing either a K-1 or 1099 form, depending on the legal structure of the specific investment.
The structure and corresponding tax form information for each investment are detailed on the offering page, along with the investment memorandum or series note supplement. These documents are available for investors to download and review when a new offering is launched on the platform, ensuring investors have the necessary information for their tax reporting needs.
How many investors are on Yieldstreet?
The website received an average of 242,000 visits in the last 3 months.
The platform has engaged a community of 462,000 members.
As of the latest data available, the platform has reached over $4.19 billion in total investments made. This substantial level of investment activity has resulted in investor returns amounting to approximately $2.37 billion in total interest and principal returned to investors.
Who is the CEO of Yieldstreet?
Michael Weisz is the Founder and Chief Executive Officer (CEO) of Yieldstreet. He co-founded the company in 2015.
Before starting Yieldstreet, Weisz had significant experience in the specialty finance sector, including roles at a New York-based credit opportunities hedge fund and as a founder of Soli Capital, a specialty finance company.
