BlackRock is teaming up with the digital asset management platform YieldStreet to launch an income-generating fund for wealthy investors.
The YieldStreet Prism Fund, which is structured as a closed-end fund that liquidates after four years, is hoping to attract accredited investors with the promise of a 7% annual yield.
The fund, which officially launches Saturday, has a $20,000 investment minimum and is available only to investors with individual incomes of at least $200,000 over each of the past two years.
The fund’s restricted investor access is due to the portfolio blend of liquid and illiquid alternative investments that will be used to create a higher-yielding fixed-income product, according to representatives from YieldStreet.
“We’re focused on income generation for consumers, and the biggest problem we’re trying to solve is access to alternatives,” said Milind Mehere, co-founder and chief executive of YieldStreet.
Mr. Mehere said that in jointly managing the portfolio, YieldStreet will be responsible for managing the illiquid investments, and BlackRock will manage the liquid alternative portion.
This will also represent the first time individual investors have had direct access to BlackRock's institutional asset management expertise.
The fund, which will charge a 1% management fee, will open for limited redemptions after 13 months but is designed for the investor money to be locked up in the fund, Mr. Mehere said.
“We are excited to partner with YieldStreet on the launch of the YieldStreet Prism Fund, said Robert Stanley, global head of fixed-income product strategy at BlackRock. “By combining BlackRock’s expertise in fixed-income investing with YieldStreet’s technology know-how, this fund provides investors with attractive opportunities beyond their usual sources of income.”
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