Yieldstreet Settles Marine Loan Losses, Investors Face Wipeout

In a recent development, the private market assets platform Yieldstreet has struck a $5 million settlement deal to recoup some of its legal expenses for an ill-fated series of marine loans. The loans, totaling $89 million, were supposed to be backed by 13 ships, but the borrowers defaulted on the deals.

While Yieldstreet has won monetary awards in a number of jurisdictions outside the U.S., the borrowers have managed to avoid paying the startup by concealing their assets. As a result, the company's recovery costs have "well exceeded the entire settlement amount," and it is unlikely that investors will see any repayment.

This latest loss follows CNBC's report last month that Yieldstreet customers in four real estate deals worth $78 million have also been wiped out, with roughly $300 million of other deals on the watchlist for possible losses. The episode has had a significant impact on the company, contributing to the collapse of a high-profile partnership with BlackRock, the world's largest asset manager, in 2020.

Yieldstreet has acknowledged the disappointing outcome, stating that it "pursued this extensive recovery effort because we are committed to exhausting every reasonable avenue for investor recovery." The firm has also announced a new business model that leans more on distributing private market funds provided by established Wall Street firms, including Goldman Sachs and the Carlyle Group.