Yieldstreet, a digital wealth management platform, launched a private business credit vertical. The new asset class vertical is Yieldstreet’s fifth asset class, joining real estate, legal, marine and art verticals.
“Our mission is to build and introduce innovative wealth creation products,” Milind Mehere, founder and CEO of YieldStreet, said. “This new asset class, private business credit, does that by allowing our existing and future investors to diversify their portfolios through new income-generating opportunities.”
The new vertical will invest in high-growth companies and make loans between $3 million and $30 million in commercial term receivables, inventory purchase orders, consumer installment loans, equipment acquisition, auto loans and other assets. Through flexible-term loans, investors can gain exposure to a broadly diversified range of assets. Private business credit, which is expected to continue to rise, is about a $1 trillion lending industry each year, primarily funded by banks, hedge funds and venture capital.
Yieldstreet expects to deploy flexible capital with the private business credit team to growing businesses across America, partner relationships and originating partners. The private business credit unit plans to extend single tranche and multi tranche term loans in partnership with consumer and commercial originators, banks, specialty finance companies, credit funds and other asset aggregators.
“The world has really changed in the last four months,” Michael Weisz, president of Yieldstreet, said. “Growing businesses need access to capital even more as the pandemic has disrupted their access to credit because traditional banks are slow to lend. With interest rates at historic low levels, investors want better yields typically less correlated to the market and with the potential for consistent passive income. This is designed to answer both of those needs.”
Yieldstreet chose Larry L. Curran II and Barbara Anderson to lead the private business credit vertical. Curran will serve as managing director and Anderson will serve as senior director and head of underwriting. The two have more than 50 years of combined experience and have worked together for more than a decade.
“We’ve brought in the right team at the right time to capitalize on a big opportunity we’re seeing in the market,” Weisz said.
Curran specializes in building businesses and has more than 25 years of success in developing receivables-based investments in the United States, South America and Europe. His expertise identifying unique opportunities in emerging markets is now focused on developing North American industries. Curran previously co-founded Vion Receivable Investments and i2B Capital. Curran also has been a principal of an NASD broker dealer, an angel investor and a Microsoft Gold Partner.
Anderson has more than 30 years of senior secured, asset-based loan underwriting, management and restructuring expertise. During her commercial lending career, Anderson held senior management roles at Bank Boston, LaSalle Bank and National City Bank, and she co-founded i2B Capital in 2015.
“We see an excellent opportunity to provide private business credit to America’s growing companies balancing the capital needs of borrowers with investors’ needs to generate predictable current income,” Curran said. “We are looking for emerging-market operators with strong management teams and proven business models otherwise limited by their size, age or asset class.”
To date, Yieldstreet has funded more than $1 billion in investments via the Yieldstreet platform and returned $600 million in principal and interest to investors. In 2019, Yieldstreet more than doubled in size as measured by revenue.