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When invest like the 1% fails: How Yieldstreet’s real estate bets left customers with massive losses
CNBC Television·2025-08-18 12:34

Investment Performance & Risk - Yield Street, a startup offering retail investors access to alternative investments, faces scrutiny due to underperforming assets [1][3] - Out of 30 deals reviewed, 23 are on the "watch list," indicating potential or actual default [1][4] - Investors have put $370 million into these funds, with $78 million already defaulted [4] - Real estate performance has plummeted from 94% to approximately 2% over a ten-year period [8] Company Response & Market Perception - Yield Street attributes the issues to higher interest rates in 2022 [6] - The company's tagline, "invest like the 1%," is questioned, with some suggesting Yield Street may be offering deals that professional investors have passed over [7][9] - The situation raises concerns about the push to include alternative investments in 401(k)s and retirement accounts [10][11] Alternative Investment Considerations - Private markets offer less liquidity and transparency compared to public markets [11] - The potential for higher returns is the trade-off for illiquidity and lack of transparency, but Yield Street's performance has not justified this trade-off [12]