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London
June 17, 2024
PI Global Investments
Alternative Investments

Yieldstreet Review 2024


Open to Non-Accredited Investors? No for individual deals
Yes for the Alternative Income Fund
Fees Between 1% and 4%, annually; there are also costs to the investments typically paid for by income from the investments before distributions
Account Minimum $10,000, but some deals have higher minimums
Investment Selection Real estate, private credit, structured notes, artwork, legal finance, private equity, cryptocurrencies, venture capital, and transportation
Dividend Frequency Varies by investment from monthly to quarterly
Website Transparency Yes, Yieldstreet is transparent regarding the deals it does, the due diligence it provides, and the fees it charges
Available Customer Support Yes, support through phone, email, live chat, and chatbot

How Does Yieldstreet Work?

Yieldstreet works similarly to other alternative investment platforms. If the investor is qualified as an accredited investor, then they will have free rein to invest in any open offering on the Yieldstreet platform. Non-accredited investors will only be able to invest in the Yieldstreet Alternative Income Fund. To get started, however, both accredited and non-accredited investors will need to open an account. 

When an investment is made it becomes a passive investment, with Yieldstreet managing the various businesses on behalf of the investors. The invested cash is tied up for a certain lock-up period, but the investment is designed to generate annual returns for the investor in the form of income or interest that, after expenses, is distributed to the investor’s Yieldstreet account.

The available investing plans include specific deals across the multiple asset classes available on Yieldstreet. Yieldstreet’s professionals look at a large number of deals and apply rigorous due-diligence standards, only choosing 9% of those they review to their members for possible investment.

In choosing their investment, the Yieldstreet member/investor can use a filter to identify opportunities that meet their criteria. Filter criteria include growth, income, or balanced opportunities; asset class; minimum investment amount; term duration; and account eligibility. Each of these initial deal summaries includes the minimum investment, term, the frequency of the payment schedule, and the type of tax documentation the investor will receive.

Clicking on an individual deal will provide additional information about the investment opportunity, including fees and additional expenses. The premise behind the investment and other documentation is also available for potential investors to review. Investors receive updates on their investments and can see all of their investments on the platform.

Key Features

Yieldstreet is available primarily to accredited investors, but the company’s Alternative Income Fund is available to non-accredited investors, too. The minimum investment is typically $10,000 but can be higher for individual deals.

The platform, available via the website or mobile apps for Android and Apple devices, is easy to use for identifying opportunities and monitoring their payments and performance. Although some funds contain multiple assets, besides the Alternative Income Fund that represents Yieldstreet’s overall performance, many of the deals are individual deals. This puts the responsibility on the investor to determine which deals are best for their situation, and ideally, that properly diversify the investors’ overall financial condition. 

Yieldstreet Alternative Income Fund investors receive quarterly distributions and can participate in a dividend reinvestment program (DRIP). Finally, Yieldstreet is only available to U.S. citizens who have an active address in the U.S. 

Fees

Yieldstreet generates an annual management fee ranging from 1% to 4%, which is different for each investment opportunity. Fees are clearly outlined on the website for each deal, both on the initial snapshot showing deals and on the deal-specific pages. The fees for some of the deals can be high, but this needs to be weighed by the value of the management team and the returns on the individual investment. Overall, Yieldstreet’s growth appears to have validated its fees, even though not all of its deals have been successful for investors.

In addition to the annual management fee, investors also need to pay certain expenses related to their investments. These fees are disclosed clearly, but they add an additional cost to overall returns because they are paid for from the income or interest generated by the deal.

The Alternative Income Fund charges a management fee of just 1%, plus administrative fees up to 0.50% annually. Yieldstreet also generates fees from the entity selling the assets that Yieldstreet members invest in.  

Transparency

Yieldstreet is transparent about the fees it charges and provides appropriate due diligence for investors to use in making decisions about individual deals. Further, Yieldstreet provides updates on the investments to its members and also informs investors how frequently they can expect distributions. Each deal also shows the lock-up period, but Yieldstreet could be a bit more forthcoming about the illiquidity of its deals. 

Liquidity

Liquidity is an important matter for investors of alternative assets, and this is also the case for Yieldstreet.

All of the individual investments on Yieldstreet’s platform have lock-up periods, which can exceed five years. Some of the investments, such as a portfolio of notes, may have holding periods of six months, but many of the other alternative investment opportunities on Yieldstreet have longer holding periods. This means investors cannot get their investment capital back until the end of the holding period. In addition to tying up investment capital, the lack of control over when the asset is sold may create negative tax implications. 

For the Alternative Income Fund, investors can withdraw funds penalty-free. However, the fund caps annual outflows at 20% of assets, or 5% per quarter, so investors may only be able to sell a pro-rata share of what they may want to sell.

Investment Selection

Yieldstreet, unlike many other narrowly focused competitors in the real estate crowdfunding space, offers its customers access to a wide selection of investment options across multiple asset types. Each asset type can also be broken down into opportunities providing income, growth, or a blend of the two. 

Yieldstreet offers customers the ability to gain market exposure to real estate, private equity, venture capital, transportation, credit-linked notes, private credit, cryptocurrencies, fine art, and legal finance. Accredited investors can gain access to multiple types of alternative assets on Yieldstreet from a single platform that uses a consistent approach and interface. 

Sectors and Domains

Yieldstreet offers its customers access to investment types across multiple real estate sectors. Yieldstreet offers customers the ability to gain market exposure to commercial investments, debt offerings, apartment buildings, industrial investments, office buildings, transportation, and more. In addition to individual investment opportunities, Yieldstreet also offers a variety of diversified portfolios, such as diversified note portfolios. 

Educational Offerings 

Yieldstreet provides a good deal of educational material for its customers, including some things not available from all alternative assets platforms. In addition to a detailed frequently asked questions (FAQ) section that breaks down content by various topics, such as getting started, setting up an account, exploring offerings, and others, the company, like many crowdsourcing companies, also produces blog posts and articles. Further, and not available from all platforms, Yieldstreet also provides investors with investment and research analysis, educational videos, and webinars that help explain subjects including tax-loss harvesting and investing in sports.

Customer Support 

Customer support at Yieldstreet is available through phone, email, live chat, and chatbot, but it does not have a chat form function. This level of support compares favorably with other alternative investment platforms.

However, the company is not without its detractors, as the company’s Trustpilot score, based on just 18 reviews, is only 2.2 out of 5. Negative comments on Trustpilot spoke of deals that performed poorly, a feeling that the company did not do proper due diligence or provide full disclosure of risks, and that the company was evasive and not forthcoming about the performance of deals they entered into.

The Bottom Line

Yieldstreet is a good choice for investors to gain exposure to alternative assets. The company provides non-accredited and accredited investors with its Alternative Income Fund, which provides exposure to a wide range of alternative assets for just a $10,000 minimum investment. Accredited investors also have access to a wide range of potential investments across multiple asset types, including real estate, private equity, venture capital, structured notes, fine art, and more.

Although Yieldstreet has a good reputation and more than 450,000 members, the company’s high overall returns do not mean individual deals have all been successful. But for those looking to add alternative assets to their overall financial portfolio, Yieldstreet is a good option for passive investors who understand the risks involved with illiquidity, mandatory holding periods, and potentially higher risk/higher reward investments.

Why You Should Trust Us

Investopedia analyzed 19 real estate crowdfunding companies and scored each based on eight major categories and 38 criteria that are crucial in evaluating the offerings and usability of these platforms. We used this data to review each company for their fees, investment selection, transparency, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best real estate crowdfunding platforms since 2020.

What Is Yieldstreet?

Yieldstreet is a financial services company that provides its customers with access to multiple private market investments known as alternative assets. Yieldstreet is involved with multiple markets, including real estate, private equity, venture capital, fine art, transportation, structured notes, and legal finance. Yieldstreet identifies the opportunities and manages the various investments. Each of Yieldstreet’s individual deals is crowdsourced, allowing investors to participate with smaller capital outlays that start at $10,000. Individual deals are available to accredited investors only, but Yieldsteet also has a fund representing its overall portfolio that is available to both accredited and non-accredited investors.

Is Yieldstreet Legit?

Yes, Yieldstreet is a legitimate company. It has been in business since 2015 and is one of the leading alternative asset platforms marketing to accredited investors. Yieldstreet has some of the best breadth of product offerings for alternative assets, including real estate, venture capital, private equity, private credit, transportation, legal finance, and even fine art. 

The company has brought more than 400 alternative asset opportunities to its more than 450,000 members with a value of $3.9 billion. Members on Yieldstreet have an average of 8.8 investments. Overall, Yieldstreet has a net annual return before fees of 9.6%. 

Is Yieldstreet a Good Investment?

While overall returns at Yieldstreet since inception in 2015 are 9.6% before fees, that does not mean every investment does that well. Investors need to determine whether they have the capital to tie up through holding periods and whether they want to diversify their financial holding by adding alternative assets to their portfolio. If so, they can choose to have general exposure through the Alternative Income Fund or specific exposure to particular markets and investment types. 

What Is the Average Return of Yieldstreet? 

The average return on Yieldstreet deals since inception in 2015 is 9.6% before fees. The Yieldstreet Alternative Income Fund has an annualized distribution rate of 8.7%. 

How We Review Real Estate Crowdfunding Platforms

To evaluate and review real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-depth industry research, company survey data collection, and hands-on evaluations of 19 companies. We grouped the 38 criteria that we collected, including investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors.

  • Fees: 15%
  • Account Services: 15%
  • Investment Selection: 15%
  • Liquidity: 12.5% 
  • Transparency: 12.5%
  • Sectors and Domains: 12.5%
  • Customer Support and Usability: 10%
  • Educational Offerings: 7.5%

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of real estate crowdfunding platforms. Read our full process for more information on how we review real estate crowdfunding platforms.



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