Venture Capital: YieldStreet, Which Brings Private Investing To Retail, Raises $100M

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Yieldstreet is a platform for alternative investments that hitherto were the preserve of one-percenters.

Yieldstreet’s mission is to reinvent an industry by providing investors access to investments previously available to the top 1%. Mom and pop investors can now access opportunities that were typically off-limits. Yieldstreet announced Wednesday its raise of $100 million via a Series C funding round. (CNBC)

The round was led by Tarsadia Investments, headed by former E-Trade CEO Mitch Caplan, and joined by Alex Brown, a division of Raymond James, KingFisher Capital, Top Tier Capital Partners and Gaingels. Existing investors, Edison Partners, Soros Fund Management, and Greenspring Associates also participated in the funding round.

Democratizing alternative investments…and the pandemic

Yieldstreet offers retail investors the opportunity to invest in alternative investments such as art, consumer and commercial lending, legal, real estate, and more. Investors can take a punt on these assets with amounts as low as $1,000.

The pandemic triggered massive growth for Yieldstreet because people reflected more profoundly on what to do with their money.

“What you saw with Covid really pulled people year and years and years ahead of when they would otherwise adopt digital investing,” said Co-founder and President Michael Weisz to CNBC.

Year-to-date, investment requests at Yieldstreet have totaled more than $300 million, nearly surpassing the $310 million requests in all of 2020.

New members added in the first five months of 2021 have already exceeded the number for all of 2020. In 2021, the firm will potentially clock revenues of $100 million.

Investors are confronted by overheated stock markets and fixed income yields ruling at decade lows. “The 60/40 investment model is over; people simply can’t retire on bond yields returning lower than two percent,” observed Mitch Caplan, President of Tarsadia.

Meanwhile, Yieldstreet’s Prism Fund has returned 4.45% since its inception in March 2020 to the end of that year.

New product

Yieldstreet investors will now be granted access to Milwaukee Bucks co-owner and hedge fund manager Marc Lasry’s Avenue Capital through the Global Dislocation Fund.

We are “really making products available to our investors that were really reserved for multi-million dollar minimums, whether its aviation or distress or dislocation or real estate opportunity and beyond,” says Weisz.

Related Story:  YieldStreet’s Prism Fund Has BlackRock as SubAdviser

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