Investors sometimes get bored with the traditional and go looking for alternative assets: modern art, third-party litigation funding, loans to shipping companies. It sounds sophisticated. It is also usually far harder to evaluate than it looks.
In plain words: alternative means, in practice, anything that is not a listed stock, a bond, or traditional real estate; and litigation funding is lending someone money to fight a lawsuit in exchange for a cut of what they win. Example: if the judge rules against them, there is nothing to split and you lose everything you put in — the outcome does not depend on a rent payment, it depends on a verdict.
The concept: asset complexity vs. tangible assets
A tangible asset is something you can see, visit, and understand without taking a course first: an apartment, a retail space. Its demand is easy to reason about because it answers a basic need.
A complex asset requires understanding an entire industry — the art market, litigation finance, maritime shipping — before you can judge whether the offered return compensates the risk. If you cannot explain in two sentences what your return depends on, you are not investing: you are betting.
Example: of a complex asset: to judge a loan to a shipping company you would need to follow freight rates, fuel prices, and port environmental rules. To judge a rented apartment, you need to know whether the neighborhood rents.
The Yieldstreet model: exotic comes at a price
Yieldstreet — operating as Willow Wealth after a restructuring — became known for offering this kind of alternative investment in the United States.
Where its limit is: these deals require significant capital, typically between USD $10,000 and $25,000 to enter, and the risks are high. When a ship sinks or a supply chain collapses, the capital evaporates. The platform faced losses of hundreds of millions of dollars from defaults in marine and ship-breaking portfolios — an expensive reminder that sophistication is not the same as safety.
In plain words: ship-breaking is dismantling old vessels to sell the steel, a portfolio is the set of investments a fund holds, and a default is the borrower failing to pay. Example: that business lives on the world price of scrap metal. When the price falls, the ship is still there but the debt goes unpaid.
What Circular Urban adds: boring is safe
Circular Urban sticks to the prudent investor's rule: invest in tangible things you understand and that people will always need. The platform focuses on traditional commercial and residential real estate.
A rented apartment or a retail space can be seen, touched, and visited, and will always have baseline demand. And you do not need USD $10,000 to get in: access starts at USD $50.
Comparison table: exotic vs. traditional
| Feature | Yieldstreet (Willow) | Circular Urban |
|---|---|---|
| Asset type | Art, legal claims, ships | Tangible real estate |
| Risk level | High (realized losses in marine and ship-breaking portfolios) | Moderate (backed by bricks) |
| Minimum amount | USD $10,000 to $25,000 | USD $50 |
| Learning curve | Complex (requires institutional expertise) | Simple (universally understood) |
A simple filter before investing
Ask yourself who pays your return and why they would still be paying it five years from now. With real estate the answer is short: a tenant who needs that space. If the answer takes a whole paragraph, the risk is in that paragraph.
What to weigh on our side
An asset being easy to understand does not make it safe. A property sits empty, loses value, or takes time to rent — and there is something we should not leave unsaid: each SAS owns a single property, so an individual investment is not diversified. A fund holding dozens of assets spreads that risk better than a single participation does.
In plain words: diversifying is spreading your money across several investments so one bad outcome cannot take everything down. Example: USD $1,000 in a single apartment depends entirely on that apartment. Spread across four different projects, one sitting empty costs you a quarter of that exposure.
Related links
- Circular Urban investment projects
- How to invest in private real estate projects
- Being the bank or being the owner: debt or appreciation
- Financial diagnostic: why do it before investing
- Circular Houses: a real estate project in Medellín
This content is educational and is not financial, legal, or tax advice. The terms of each platform can change; check their current information before deciding and talk to your own advisor.
Published by
María Camila Becerra Cabrales