Yieldstreet, the pioneer democratizing access to alternative investments, is getting crushed. In March, it told investors that they would face write-downs on loans secured by commercial ships. The vessels intended for scrap metal have caused the most alarm. Yieldstreet has now abandoned ship on 13 vessels sailing in international waters, with these ships representing a total of $89 million in member loans secured.
Yieldstreet’s real estate funds skyrocketed in popularity despite the chaotic era. By 2023, they made up 26% of all dollars invested on the platform. The firm’s recent track record has raised alarm. This is particularly the case in light of a Yieldstreet lawsuit from 2020, where Yieldstreet sued one of its borrowers for fraud. Shortly thereafter, the U.S. Securities and Exchange Commission (SEC) slapped the online platform with a $1.9 million penalty for its sale of an existing $14.5 million marine loan. This constant criticism has created an even more awkward dynamic between Yieldstreet and investors.
In 2020, Yieldstreet was the talk of the town after their successful $350 million acquisition of Cadre, a startup co-founded by Jared Kushner. This strategic acquisition was intended to round out its product offering and bolster its competitive position in the market. In addition to this acquisition, Yieldstreet officially became a broker-dealer, enabling it to provide funds from outside asset managers such as Goldman Sachs and the Carlyle Group.
The company’s luck started to run dry, especially in the area of real estate. As of early 2023, Yieldstreet stopped publishing quarterly portfolio snapshots, which would seem wide open to the appearance of transparency. Meanwhile, the returns on its real estate investments have recently seen a stark decline over the last two years. They fell from an astonishing 9.4% annual return in 2021 to just 2% in 2023.
In late 2022, Yieldstreet assured investors that real estate was a “safe(er) haven” asset amidst rising interest rates and high inflation. Yet, the reality proved starkly different. One individual investor and Yieldstreet customer, Mark Underhill, invested $600,000 into 22 funds, all of which have lost him about $200,000. He testified to his distress that no one had considered the massive losses even though the company had promised that collateral was backed.
“But there’s no consideration of these type of gut-punch losses. They talked about how their deals were backed by collateral, and they gave you all these reasons that make you feel there’s something left if the deal goes south.” – Mark Underhill
Another institutional investor, Justin Klish, has filed a complaint with the SEC. In the lawsuits, he alleges Yieldstreet deceived its investors about the risks they could face. Klish’s searchable document would go on to substantiate Underhill’s complaints, raising questions about internal, systemic problems with the company’s investment strategy.
“When I dug into the other deals, I realized that this is systemic,” – Justin Klish
Yieldstreet’s equity real estate offerings from 2021 and 2022 faced challenges as interest rates boomed. Adverse market conditions were hugely impactful on their bad performance too. A spokeswoman for Yieldstreet acknowledged the impact on their offerings, stating:
“Of the nearly $5 billion invested across the platform, a set of real estate equity offerings originated during 2021–2022 were significantly impacted by rising interest rates and broader market conditions that pressured multifamily valuations across the industry.” – Yieldstreet spokeswoman
As losses continued to mount, Yieldstreet CEO Michael Weisz resigned in May 2025. Mitch Caplan filled his shoes, ushering in a new era of management during a challenging time for the firm.
Underhill articulated a broader concern shared by many investors regarding Yieldstreet’s management and decision-making processes:
“The thing that is mind-boggling is, how did they fail so badly on so many deals in so many markets?” – Mark Underhill
Weisz previously defended his approach to investment risk:
“I’m not here to tell you that Milind and Michael are the world’s smartest investors and there’s never going to be something that goes wrong.” – Michael Weisz
He emphasized the importance of creating financial independence for investors:
“Our mission at Yieldstreet is, how do we help create financial independence for millions of people? You do that by helping people generate consistent, passive income.” – Michael Weisz