Yieldstreet, a New York-based private investment platform with a significant allocation to the commercial real estate sector, has obtained a $400 million warehouse line from Monroe Capital that significantly expands its investment capacity.
“The use of a warehouse facility is not new for us and we have used warehouse facilities since shortly after our inception and our previous largest facility was $250 million,” co-founder Michael Weisz said, noting the firm has access to about $800 million of warehouse financing.
Warehouse financing is the best fit for the firm’s business, according to Weisz, as it allows Yieldstreet to move quickly on potential investments with what it views as marquee sponsors within the real estate sector and beyond. After making an investment via its warehouse line, the firm then distributes the opportunity to its investors.
“We use warehouses because it ultimately means access to the best investments,” Weisz said. “We are able to go to investors, managers and owners of real estate and say, ‘We really love this asset you’re buying and want to be your partner.’ The top-quality sponsors want to make sure there is no execution risk or wait for investors to come in because when they close a deal, they need to know the check is going to be there and with our availability of capital they know we will close.”
Monroe Capital was a good fit for the firm’s strategy for several reasons, including Weisz’s background in specialty finance and the parallel growth both firms have seen.
“Ten or fifteen years ago, Monroe Capital was a small shop, hustling and trying to grow as we were trying to do the same,” Weisz said. “I have always admired Monroe Capital as an organization that behaves with a high degree of ethics. They built a similar business with a very diversified approach to how they invest. It is easier to have a partner with a similar depth of expertise.”
Yieldstreet launched in 2015 with the aim of bringing private investments to individuals. High-net-worth investors, along with the largest institutions and endowments, have been investing up to half of their portfolios in private markets, including real estate, private equity, private credit and fine art.