This recent piece from CNBC about Yieldstreet (who’s tagline is “Invest like the 1%…”) caught my attention as I have seen a number of apps or online platforms offering “access” to alternative investments such as farmland and specific crops (I think there is even one in Malaysia for palm oil, etc):
📰 When ‘invest like the 1%’ fails: How Yieldstreet’s real estate bets left customers with massive losses (CNBC) August 2025 🗃️
Key Points
- Yieldstreet is one of the best-known examples of American startups with the stated mission of democratizing access to assets such as real estate, litigation proceeds and private credit.
- But some Yieldstreet customers who participated in its real estate deals face huge losses on investments that they say turned out to be far riskier than they thought.
- Of 30 deals that CNBC reviewed information on, four have been declared total losses by Yieldstreet. Of the rest, 23 are deemed to be on “watchlist” by the startup as it seeks to recoup value for investors, sometimes by raising more funds from members.
- Yieldstreet said some of its real estate funds were “significantly impacted” by rising interest rates and market conditions.
The story began with a 46-year-old financial services worker living in Miami who:
… invested $400,000 in two real estate projects: A luxury apartment building in downtown Nashville overseen by former WeWork CEO Adam Neumann’s family office, and a three-building renovation in the Chelsea neighborhood of New York. Each project had targeted annual returns of around 20%.
Three years later, Klish said he has little hope of ever seeing his money again. Yieldstreet declared the Nashville project a total loss in May, according to an investor letter, wiping out $300,000 of his funds. The Chelsea deal needs to raise fresh capital to avoid a similar fate, according to another letter. Both letters were reviewed by CNBC.
Its one thing to invest in publicly listed real estate stocks or funds from around the world; but unless he is originally from New York or Tennessee, I don’t know what somebody living in Miami knows about investing in a single New York or Nashville real estate project via an investment fund (beyond any slick PowerPoint presentation and other documents provided solely by the fund or project manager).
Moreover, $400,000 alone with or without a mortgage is still enough buy some sort of a physical property (where you hold the title) in most parts of the USA that could be rented out via a property management company or an AirBnB manager for a cut (if you don’t want the hassles of doing things yourself).
The article then noted:
The startup’s central premise is that the world beyond public stocks and bonds — often called alternative assets or private market investments — provides both smoother sailing and the possibility of higher returns, a win-win proposition. This month, President Donald Trump signed an executive order designed to allow private market investments in U.S. retirement plans.
But Yieldstreet customers who participated in its real estate deals in recent years say they’ve learned the flip side of the private markets: They face huge losses on investments that turned out far riskier than they thought, while their money has been locked up for years with little to show for it besides frustration.
But:
… several professional investors pointed to the possibility that, instead of securing only top-quality deals in real estate, Yieldstreet may be getting ones that are picked over by more established players.
“There’s no question you’ve seen deals that institutions have passed on that went to the platforms because retail investors might have less discipline than the institutional ones,” said Greg Friedman, CEO of Peachtree Group, an Atlanta-based commercial real estate investment firm.
A few weeks ago, I discussed anti-private equity activist Tiffany Cianci claiming that Harvard and Yale are trying to quietly unload their private equity investments (that they have already strip mined, but nobody wants to touch any of it). Apparently, they have been pitching a continuation fund for the general public that promises “1,000% returns that will make your brain melt” because, in the words of Cianci, “wealthy people always give us access to their investments that give them 1,000% returns…” Or in the case of Yieldtreet, access to the “1%’s” investments…
The piece went on and noted:
“After exhausting all options to preserve value, YieldStreet determined there was no reasonable path to recovery,” the firm told customers who invested $15 million in the Upper West Side deal. “We sold our position for $1.”
It’s unclear if Yieldstreet, which makes money by charging annual management fees of around 2% on invested funds, itself suffered financial losses on the defaults.
I think we clearly know the answer to that question…
In my case, I opted to plant an almond orchard on a property (where I grew up) that various family members have been living on for about about 100 years and previously had grapes and then walnuts. Unlike with the investment the “46-year-old financial services worker living in Miami” made with his $400,000, I can directly control most of the expenses (although most are unavoidable if you want a healthy orchard) and I do some of the work myself when I visit the USA (it was up to 100F degrees late last week when the harvest was finished and I had walked up/down every row about 2 to 3 times to make sure nuts were off the trees and in rows to be swept to maximize my return…).
I still pay the farmer who leased and planted an orchard next door to do most of the work (as he has the necessary expertise, equipment, and probably gets good discounts on chemicals, fertilizer, etc. given the amount of acreage he farms) and I receive detailed invoices of all work done and materials used.
My elderly parents could have also leased the land to someone like him to plant the orchard; but that would have also tied up the property they live on (as opposed to next door as the owner’s house is on the next parcel which he planted with almonds himself) plus these sorts of deals come with drawbacks (e.g. the leasees often are short sighted and don’t take good care of the trees they plant).
I do know a relatively young expat in Thailand who married into a local landlord family and has been investing in local plantations. Apparently, many small plantations in Thailand have elderly owners who’s children/grandchildren prefer to live or work in cities. Many of these small holdings may not have been well taken care off; but with some capital investments (e.g. fertilizer, etc.) and economies of scale, yields increase, the owners can earn some income, and apparently my acquaintance is getting a good return on his money (it probably helps having a Thai wife and in-laws who are landlords who probably have good local connections as go-betweens). He also knows buyers in Bangkok from his previous jobs and might be able to avoid any middlemen or get better prices for whatever is being grown.
Likewise, a retired family friend had for years managed an almond orchard owned by a German industrialist who had probably bought the property as a wealth hedge should the Soviets ever invade West Germany (as I doubt he knew anything about growing almonds and I don’t think he had relatives in the area). Not to mention the family had a valid tax excuse to visit California to inspect the investment (and then go on shopping trips to buy suitcases full of jeans as German VAT taxes were ridiculous on blue jeans at home) plus keep the earnings from the almonds in American bank accounts.
However, not everyone has direct access to some sort of unique investment or something the so-called 1% might invest in as promised by platforms like Yieldstreet. If you are a simple retail investor or a small family office or institution looking for returns outside the overvalued US stock market (or rather key idiocies driven by a few stocks), just get an Interactive Brokers or an account from a similar broker that gives you access to thousands of (easier to understand or research and no to mention better regulated) individual stocks and bonds in markets around the world…
As of late August, more July fund updates (our continuously updated post containing all funds is here) have become available along with new research starting with some non-EM research covering Europe:
- 🔬🇪🇺 EU–U.S. Trade Deal: Reduced Risks, but Still a Headwind for Europe (PIMCO) – The degree to which growth in Europe slows, along with inflation developments, will be key in determining the path ahead for the European Central Bank.
- 🔬🌍 Europe’s Next Financial Crisis Could Be the Big One (Chicago Booth) – The EU’s failure to reform after emergencies has left the euro vulnerable.
- 🔬🌍🚩 Pushing rocks uphill: the case for European equities in 2025(Baillie Gifford) – Key points
- After years of underperformance, European equities are showing signs of revival as market shocks prompt a rethink on portfolio diversification
- Germany’s €500bn infrastructure plan signals a shift from austerity to growth, with Europe now more fiscally expansive than the US
- European champions such as Nexans, Kingspan, ASML and ASM are well-positioned to benefit from Europe’s renewed focus on energy, infrastructure and semiconductor self-sufficiency
- Explore this page
New Asia Fund Documents & Research
- 🎙️🌏 abrdn Asia-Pacific Income Fund, Inc. (FAX) – August 2025 (Aberdeen Investments) 13:09 Minutes – Listen to an informative interview with Adam McCabe, Aberdeen’s Head of Fixed Income – Asia Pacific, discussing the current outlook for abrdn Asia-Pacific Income Fund, Inc. (NYSEAMERICAN: FAX).
To read more, please visit this article on Substack
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