16 Dec 2022
2022 YELDO Performance Report
2022 YELDO Performance Report
YELDO believes transparency is key to develop a long-lasting relationship with our professional investors. Below is our 2022 Performance Report with insights into YELDO portfolio and our inception-to-date performance.
YELDO KEY HIGHLIGHTS 2022
In 2022 we were glad to celebrate the financing of our 20th deal, the achievement of our 6th exit and above all the recording of 17.9% annualized return for our investors, irrespective of this year adverse macroeconomic conditions.
In 2022, the Traditional Portfolio made of 60% Equities and 40% Bonds has suffered and registered a negative return of -12.1%. In the same period YELDO investments have been able to record an annualized 17.9% net of fees and costs.
Traditional Portfolio vs YELDO investments, IRR (Jan - Nov 2022)
YELDO KEY PERFORMANCE METRICS
2019-2022
Since 2019, our investments have been focusing on stable economic areas in Continental Europe, in particular Switzerland and Northern Italy. We have specialized in Real Estate projects of different types across several asset classes, spanning from Residential to Commercial, also including Hospitality.
As of today we have financed projects for EUR 302m of underlying Gross Asset Value (GAV), delivered to investors 14.7% annual compounded return (IRR) net of fees and costs and recorded 1.51x Multiple On Invested Capital (MOIC).
YELDO KPI's
| Total transactions | 20 |
|---|---|
| Projects financed, GAV | EUR 302,082,000 |
| YELDO investments, IRR | 14.7% |
| YELDO preferred equity positions, IRR | 17.8% |
| YELDO debt positions, IRR | 11.5% |
| On time payments, % | 100% |
| Number of exits | 6 |
YELDO INVESTMENTS PERFORMANCE
2019-2022
Our investment philosophy has been the same through the years: we specialize in asset-backed preferred positions (either preferred equity or debt) that are always shielded by a sponsor equity participation. This approach offers several benefits, such as decorrelation from public markets, capital protection (due to asset-backed, over-collateralized deals) and a hedge against inflation.
Since 2019, our investments have recorded 14.7% IRR net of fees and costs to YELDO investors. Our Preferred Equity positions returned an annualized 17.8% and our Debt positions returned an annualized 11.5%.
YELDO investments, IRR by product type (Jan 2019 - Nov 2022)
To provide a benchmark, one could look at the Traditional Portfolio: a portfolio invested in 60% Equities and 40% Bonds. Compared to this portfolio, YELDO investments have generated 11.3% more annually for investors.
Traditional Portfolio vs YELDO investments, IRR (Jan 2019 - Nov 2022)
We believe including a share of alternative investments to a well balanced Traditional Portfolio has the potential to improve returns while providing additional protection against volatility, as proven by the numbers.
An Alternative Portfolio that includes an allocation of YELDO investments (20% invested in YELDO, 50% in Equities and 30% in Bonds) would have outperformed the Traditional Portfolio by 2.9% per year net of fees in the last 4 years.
Traditional Portfolio vs Alternative Portfolio, IRR (Jan 2019 - Nov 2022)
CLOSING REMARKS
We believe private debt real estate is likely to continue to play a major role in offering potential for protection against market volatility and inflation, considering the low correlation with traditional public markets and the hedge against inflation.
In 2023, we will expand our product offering to third-party funds, namely NPL Real Estate funds managed by top-tier institutional investment managers, and we will launch our first YELDO Pan-European Real Estate Private Debt fund: our open-ended fund targeting real estate senior and mezzanine positions across Europe.
These new product launches continue strengthening YELDO mission: provide direct digital access to asset-backed alternative investments for professional investors.
