The closed-ended fund targets a 7% annual distribution.

Digital fintech platform YieldStreet is offering a closed-ended, income-yielding fund that will be co-managed by BlackRock (NYSE: BLK), the world’s largest asset manager. The YieldStreet Prism Fund will be available to wealthy investors who can invest a minimum of $20,000. Besides, they should have earned at least $200,000 over each of the past two years. (InvestmentNews)

How the fund works

The YieldStreet Prism Fund will liquidate only at the end of four years but will allow limited redemptions after 13 months. The lock-in periods reflect the fund’s proposed investment in a mix of liquid and illiquid alternative investments. BlackRock will manage the liquid multi-asset sleeve, while YieldStreet will run the private assets.

The fund intends to distribute a return of 7% annually paid out in quarterly installments.

The YieldStreet fund will charge about 1.5% in fees, according to Forbes. The private assets could be short term small business financing or even a litigation funding deal. Assets could be in sectors such as real estate, shipping, marine finance, legal finance, art finance, and commercial loans.

YieldStreet to level the field for individuals

“We’re focused on income generation for consumers, and the biggest problem we’re trying to solve is access to alternatives,” said Milind Mehere, co-founder and chief executive of YieldStreet, to InvestmentNews.

Alternatives have traditionally been available to only institutions but democratization moves by fintechs such as YieldStreet are challenging that status quo. Regular, though accredited investors can now also join the game. It may be only a matter of time before retail investors get the same opportunities.

Last month, YieldStreet partnered with Citi (NYSE: C) to bring $2 billion of hedge-fund-like credit investments to accredited investors. BlackRock reportedly spent 18 months checking out YieldStreet before agreeing on the Prism partnership.

“YieldStreet is at the forefront of creating unique investment opportunities, providing investors with the potential for a consistent source of return in today’s low yield environment,” said Michael Weisz, Founder and President of YieldStreet in a statement. “We are thrilled to be teaming up with BlackRock in providing investors a diversified income product.”

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