Form 40-APP Yieldstreet Alternative

July 11, 2025 12:19 PM EDT

 

File No. 812-[_]

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

In the Matter of the Application of:

 

YIELDSTREET ALTERNATIVE INCOME FUND INC., YIELDSTREET MANAGEMENT, LLC, YIELDSTREET INC., YIELDSTREET HOLDINGS LLC, YS ALTNOTES I LLC, YS ALTNOTES II LLC, YS ALTNOTES III LLC, YS BP CML I LLC, YS EH PBC I LLC, YS IVC REL I LLC, YS IVC REL II LLC, YS PP REQ II LLC, YS LP PBC I LLC, YS PRG REL I LLC, YS AVTR REL XIX LLC, YS OCT PBC I LLC, YS OCT PBC III LLC, YS TF SD I LLC, YS ATF I LLC, YS PC UPG I LLC, YS-HP-S JV Corp., YS PP REQ I, LLC, AND YS PP REQ II P, LLC

 

300 Park Avenue, 15th Floor

New York, NY 10022

(844) 943-5378

 

 

 

APPLICATION FOR AN ORDER PURSUANT TO SECTIONS 17(d) AND 57(i) OF THE INVESTMENT COMPANY ACT OF 1940 AND RULE 17d-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 PERMITTING CERTAIN JOINT TRANSACTIONS OTHERWISE PROHIBITED BY SECTIONS 17(d) AND 57(a)(4) OF AND RULE 17d-1 UNDER THE INVESTMENT COMPANY ACT OF 1940

 

 

 

All Communications, Notices and Orders to:

 

Will Majeski, Esq.

Deputy General Counsel

Yieldstreet Alternative Income Fund Inc.

300 Park Avenue, 15th Floor

New York, NY 10022
Telephone: (844) 943-5378

 

 

 

Copies to:

Nicole Simon

Stradley Ronon Stevens & Young, LLP

100 Park Avenue, Suite 2000

New York, NY 10017
Telephone: (212) 812-4137

 

 

 

July 11, 2025

 

 

 

 

 

 

UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION

 

I.SUMMARY OF APPLICATION

 

The following entities hereby request an order (the “Order”) of the U.S. Securities and Exchange Commission (the “SEC” or “Commission”) under Section 57(i) of the Investment Company Act of 1940, as amended (the “1940 Act”),1 and Rule 17d-1, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1 thereunder. The Order would supersede the exemptive order issued by the Commission on November 10, 2020 (the “Prior Order”)2 that was granted pursuant to Sections 57(a)(4), 57(i) and Rule 17d-1, with the result that no person will continue to rely on the Prior Order if the Order is granted.

 

·Yieldstreet Alternative Income Fund Inc. (formerly YieldStreet Prism Fund Inc.), a closed-end management investment company registered under the 1940 Act (“the Company”);
   
 ·YS-HP-S JV Corp., YS PP REQ I, LLC and YS PP REQ II P, LLC (the “Existing Wholly-Owned Subsidiaries”), each of which is a separate and distinct legal entity and each of which is a Wholly-Owned Investment Sub (as defined below) of the Company;

 

·YieldStreet Management, LLC, the Company’s investment adviser, on behalf of itself and its successors (“YSM”)3;

 

·YieldStreet Inc., a Delaware corporation that owns and controls YSM (“YS”);

 

·Direct and indirect wholly- or majority-owned subsidiaries of YS, including YieldStreet Holdings LLC, YS ALTNOTES I LLC, YS ALTNOTES II LLC, and YS ALTNOTES III LLC, each of which is a Delaware limited liability company that, from time to time, may hold various financial assets in a principal capacity (together, in such capacity, the “Existing YS Proprietary Accounts”);

 

·The following investment vehicles, each of which is a separate and distinct legal entity and each of which would be an investment company but for Section 3(c)(1), 3(c)(5)(C) or 3(c)(7) (the “Existing Affiliated Funds” and together with the Company, YSM, YS, the Existing Wholly-Owned Subsidiaries and the Existing YS Proprietary Accounts, the “Applicants”)4:

 

oYS BP CML I LLC;
oYS EH PBC I LLC;
oYS IVC REL I LLC;

 

 

1Unless otherwise indicated, all section and rule references herein are to the 1940 Act and rules promulgated thereunder.
  
2Yieldstreet Prism Fund Inc., et al. (File No. 812-15038), Release No. IC-15038 (October 15, 2020) (notice), Release No. IC-34090 (November 10, 2020) (order).
  
3The term “successor,” as applied to an Adviser, means an entity which results from a reorganization into another jurisdiction or change in the type of business organization.
  
4All existing entities that currently intend to rely upon the requested Order have been named as Applicants. Any other existing or future entity that subsequently relies on the Order will comply with the terms and conditions of the Application.

 

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oYS IVC REL II LLC;
oYS PP REQ II LLC;
oYS LP PBC I LLC;
oYS PRG REL I LLC;
oYS AVTR REL XIX LLC;
oYS OCT PBC I LLC;
oYS OCT PBC III LLC;
oYS TF SD I LLC;
oYS ATF I LLC; and
oYS PC UPG I LLC.

 

The relief requested in this application for the Order (the “Application”) would allow a Regulated Fund5 and one or more Affiliated Entities6 to engage in Co-Investment Transactions7 subject to the terms and conditions described herein. The Regulated Funds and Affiliated Entities that participate in a Co-Investment Transaction are collectively referred to herein as “Participants.”8 The Applicants do not seek relief for transactions effected consistent with Commission staff no-action positions.9

 

 

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“Regulated Fund” means the Existing Regulated Funds and any Future Regulated Funds. “Future Regulated Fund” means an entity (a) that is a closed-end management investment company registered under the 1940 Act, or a closed-end management investment company that has elected to be regulated as a business development company under the 1940 Act, (b) whose (1) primary investment adviser or (2) sub-adviser is an Adviser (as defined below) and (c) that intends to engage in Co-Investment Transactions. If an Adviser serves as sub-adviser to a Regulated Fund whose primary adviser is not also an Adviser, such primary adviser shall be deemed to be an Adviser with respect to conditions 3 and 4 only.

The term Regulated Fund also includes (a) any Wholly-Owned Investment Sub (as defined below) of a Regulated Fund, (b) any Joint Venture (as defined below) of a Regulated Fund, and (c) any BDC Downstream Fund (as defined below) of a Regulated Fund that is a business development company. “Wholly-Owned Investment Sub” means an entity: (a) that is a “wholly-owned subsidiary” (as defined in Section 2(a)(43) of the 1940 Act) of a Regulated Fund; (b) whose sole business purpose is to hold one or more investments and which may issue debt on behalf or in lieu of such Regulated Fund; and (c) is not a registered investment company or a business development company. “Joint Venture” means an unconsolidated joint venture subsidiary of a Regulated Fund, in which all portfolio decisions, and generally all other decisions in respect of such joint venture, must be approved by an investment committee consisting of representatives of the Regulated Fund and the unaffiliated joint venture partner (with approval from a representative of each required). “BDC Downstream Fund” means an entity (a) directly or indirectly controlled by a Regulated Fund that is a business development company, (b) that is not controlled by any person other than the Regulated Fund (except a person that indirectly controls the entity solely because it controls the Regulated Fund), (c) that would be an investment company but for Section 3(c)(1) or 3(c)(7) of the 1940 Act, (d) whose investment adviser is an Adviser and (e) that is not a Wholly-Owned Investment Sub.

In the case of a Wholly-Owned Investment Sub that does not have a chief compliance officer or a Board, the chief compliance officer and Board of the Regulated Fund that controls the Wholly-Owned Investment Sub will be deemed to serve those roles for the Wholly-Owned Investment Sub. In the case of a Joint Venture or a BDC Downstream Fund (as applicable) that does not have a chief compliance officer or a Board, the chief compliance officer of the Regulated Fund will be deemed to be the Joint Venture’s or BDC Downstream Fund’s chief compliance officer, and the Joint Venture’s or BDC Downstream Fund’s investment committee will be deemed to be the Joint Venture’s or BDC Downstream Fund’s Board.
  
6“Affiliated Entity” means an entity not controlled by a Regulated Fund that intends to engage in Co-Investment Transactions and that is (a) with respect to a Regulated Fund, another Regulated Fund; (b) an Adviser or its affiliates (other than an open-end investment company registered under the 1940 Act), and any direct or indirect, wholly- or majority-owned subsidiary of an Adviser or its affiliates (other than of an open-end investment company registered under the 1940 Act), that is participating in a Co-Investment Transaction in a principal capacity; or (c) any entity that would be an investment company but for Section 3(c) of the 1940 Act or Rule 3a-7 thereunder and whose investment adviser is an Adviser. To the extent that an entity described in clause (b) is not advised by an Adviser, such entity shall be deemed to be an Adviser for purposes of the conditions.
  
7“Co-Investment Transaction” means the acquisition or Disposition of securities of an issuer in a transaction effected in reliance on the Order or previously granted relief.
  
8“Adviser” means YSM and any other investment adviser controlling, controlled by, or under common control with YSM. The term “Adviser” also includes any internally-managed Regulated Fund.
  
9See, e.g., Massachusetts Mutual Life Insurance Co. (pub. avail. June 7, 2000), Massachusetts Mutual Life Insurance Co. (pub. avail. July 28, 2000) and SMC Capital, Inc. (pub. avail. Sept. 5, 1995).

 

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II.GENERAL DESCRIPTION OF THE APPLICANTS

 

A.The Company

 

The Company was organized as a Maryland corporation on December 17, 2018 and is an externally managed, non-diversified, closed-end management investment company registered under the 1940 Act. The Company commenced operations on March 9, 2020. intends to qualify annually as a regulated investment company under Sub-Chapter M of the Internal Revenue Code of 1986, as amended. The Company’s principal place of business is 300 Park Avenue, 15th Floor, New York, NY 10022.

 

The Company’s primary investment objective is to generate current income, with a secondary objective of capital appreciation. The Company has a five-member board (the “Company Board”), of which three members are not “interested” persons of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.10

 

B.The Existing Wholly-Owned Subsidiaries

 

Each of the Existing Wholly-Owned Subsidiaries is a direct or indirect wholly-owned subsidiary of the Company whose sole business purpose is to hold one or more investments on behalf of the Company. Each of the Existing Wholly-Owned Subsidiaries is a separate and distinct legal entity. The Existing Wholly-Owned Subsidiaries have investment objectives and strategies that are substantially the same as, or a subset of the Company. The Existing Wholly-Owned Subsidiaries are not registered investment companies or business development companies.

 

C.YSM

 

YSM is a Delaware limited liability company. YSM is registered as an investment adviser with the SEC under the Advisers Act and is led by a team of investment professionals.

 

YSM also manages the Existing Affiliated Funds, as well as YS ALTNOTES I LLC, YS ALTNOTES II LLC, and YS ALTNOTES III LLC (the “YS Altnotes Vehicles”), and may in the future manage additional private or public investment vehicles, including additional registered investment companies or BDCs. YSM has various business lines that it may operate through wholly- or majority-owned subsidiaries.

 

YSM serves as investment adviser to the Company pursuant to an investment advisory agreement and also serves as investment adviser to the Existing Affiliated Funds and each of the YS Altnotes Vehicles. YSM reviews investments with respect to the Company, the Existing Affiliated Funds, and the YS Altnotes Vehicles and determines whether or not each entity should invest in a new portfolio company and, if so, to what extent.

 

D.YS

 

YS is a Delaware corporation and is privately held. YS owns and controls YSM. YS has various business lines that it may operate through wholly- or majority-owned subsidiaries.

 

 

10The Board of each Future Regulated Fund will consist of a majority of members who are not “interested persons” of such Future Regulated Fund within the meaning of Section 2(a)(19) of the 1940 Act.

 

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E.Existing YS Proprietary Accounts

 

Each of the Existing YS Proprietary Accounts was formed as a limited liability company under the laws of the state of Delaware and is a direct or indirect, wholly- or majority-owned subsidiary of YS that, from time to time, may hold various financial assets in a principal capacity.

 

F.The Existing Affiliated Funds

 

Each Existing Affiliated Fund was formed as a limited liability company under the laws of the state of Delaware and is managed by YSM. Each Existing Affiliated Fund is a separate and distinct legal entity and each relies on the exclusion from the definition of “investment company” under the 1940 Act provided by Section 3(c)(1), 3(c)(5)(C) or 3(c)(7)11 thereunder and, accordingly, neither is registered under the 1940 Act.

 

III.ORDER REQUESTED

 

The Applicants request an Order of the Commission under Sections 17(d) and 57(i) of the 1940 Act and Rule 17d-l thereunder to permit, subject to the terms and conditions set forth below in this Application (the “Conditions”), each Regulated Fund to be able to participate with one or more Affiliated Entities in Co-Investment Transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1 thereunder.

 

A.Applicable Law

 

Section 17(d), in relevant part, prohibits an affiliated person, or an affiliated person of such affiliated person, of a registered investment company, acting as principal, from effecting any transaction in which the registered investment company is “a joint or a joint and several participant with such person” in contravention of such rules as the SEC may prescribe “for the purpose of limiting or preventing participation by such [fund] on a basis different from or less advantageous than that of such other participant.”

 

Rule 17d-l prohibits an affiliated person, or an affiliated person of such affiliated person, of a registered investment company, acting as principal, from participating in, or effecting any transaction in connection with, any “joint enterprise or other joint arrangement or profit-sharing plan”12 in which the fund is a participant without first obtaining an order from the SEC.

 

 

11In the future, the Affiliated Fund may register as a closed-end management investment company under the 1940 Act and, if so registered, will be considered a Regulated Fund for purposes of this application.
  
12Rule 17d-1(c) defines a “[j]oint enterprise or other joint arrangement or profit-sharing plan” to include, in relevant part, “any written or oral plan, contract, authorization or arrangement or any practice or understanding concerning an enterprise or undertaking whereby a registered investment company … and any affiliated person of or principal underwriter for such registered company, or any affiliated person of such a person or principal underwriter, have a joint or a joint and several participation, or share in the profits of such enterprise or undertaking ….”

 

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Section 57(a)(4), in relevant part, prohibits any person related to a business development company in the manner described in Section 57(b), acting as principal, from knowingly effecting any transaction in which the business development company is a joint or a joint and several participant with such persons in contravention of such rules as the Commission may prescribe for the purpose of limiting or preventing participation by the business development company on a basis less advantageous than that of such person. Section 57(i) provides that, until the SEC prescribes rules under Section 57(a), the SEC’s rules under Section 17(d) applicable to registered closed-end investment companies will be deemed to apply to persons subject to the prohibitions of Section 57(a). Because the SEC has not adopted any rules under Section 57(a), Rule 17d-1 applies to persons subject to the prohibitions of Section 57(a).

 

Rule 17d-1(b) provides, in relevant part, that in passing upon applications under the rule, the Commission will consider whether the participation of a registered investment company in a joint enterprise, joint arrangement or profit-sharing plan on the basis proposed is consistent with the provisions, policies and purposes of the 1940 Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.

 

B.Need for Relief

 

Each Regulated Fund may be deemed to be an affiliated person of each other Regulated Fund within the meaning of Section 2(a)(3) if it is deemed to be under common control because an Adviser is or will be either the investment adviser or sub-adviser to each Regulated Fund. Section 17(d) and Section 57(b) apply to any investment adviser to a closed-end fund or a business development company, respectively, including a sub-adviser. Thus, an Adviser and any Affiliated Entities that it advises could be deemed to be persons related to Regulated Funds in a manner described by Sections 17(d) and 57(b). YSM is majority-owned by YS and is thus is an affiliated person of YS.

 

Accordingly, with respect to YSM, and any other Advisers that are deemed to be affiliated persons of each other, Affiliated Entities advised by any of them could be deemed to be persons related to Regulated Funds (or a company controlled by a Regulated Fund) in a manner described by Sections 17(d) and 57(b). In addition, any entities or accounts controlled by or under common control with YSM, and/or any other Advisers that are deemed to be affiliated persons of each other that may, from time to time, hold various financial assets in a principal capacity, could be deemed to be persons related to Regulated Funds (or a company controlled by a Regulated Fund) in a manner described by Sections 17(d) and 57(b). Finally, with respect to any Wholly-Owned Investment Sub, Joint Venture, or BDC Downstream Fund of a Regulated Fund, such entity would be a company controlled by its parent Regulated Fund for purposes of Section 57(a)(4) of the 1940 Act and Rule 17d-1 under the 1940 Act.

 

C.Conditions

 

Applicants agree that any Order granting the requested relief will be subject to the following Conditions.

 

1.            Same Terms. With respect to any Co-Investment Transaction, each Regulated Fund, and Affiliated Entity participating in such transaction will acquire, or dispose of, as the case may be, the same class of securities, at the same time, for the same price and with the same conversion, financial reporting and registration rights, and with substantially the same other terms (provided that the settlement date for an Affiliated Entity may occur up to ten business days after the settlement date for the Regulated Fund, and vice versa). If a Participant, but not all of the Regulated Funds, has the right to nominate a director for election to a portfolio company’s board of directors, the right to appoint a board observer or any similar right to participate in the governance or management of a portfolio company, the Board of each Regulated Fund that does not hold this right must be given the opportunity to veto the selection of such person.13

 

 

13Such a Board can also, consistent with applicable fund documents, facilitate this opportunity by delegating the authority to veto the selection of such person to a committee of the Board.

 

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2.            Existing Investments in the Issuer. Prior to a Regulated Fund acquiring in a Co-Investment Transaction a security of an issuer in which an Affiliated Entity has an existing interest in such issuer, the “required majority,” as defined in Section 57(o) of the 1940 Act,14 of the Regulated Fund (“Required Majority”) will take the steps set forth in Section 57(f) of the 1940 Act,15 unless: (i) the Regulated Fund already holds the same security as each such Affiliated Entity; and (ii) the Regulated Fund and each other Affiliated Entity holding the security is participating in the acquisition in approximate proportion to its then-current holdings.

 

3.            Related Expenses. Any expenses associated with acquiring, holding or disposing of any securities acquired in a Co-Investment Transaction, to the extent not borne by the Adviser(s), will be shared among the Participants in proportion to the relative amounts of the securities being acquired, held or disposed of, as the case may be.16

 

4.            No Remuneration. Any transaction fee17 (including break-up, structuring, monitoring or commitment fees but excluding broker’s fees contemplated by section 17(e) or 57(k) of the 1940 Act, as applicable), received by an Adviser and/or a Participant in connection with a Co-Investment Transaction will be distributed to the Participants on a pro rata basis based on the amounts they invested or committed, as the case may be, in such Co-Investment Transaction. If any transaction fee is to be held by an Adviser pending consummation of the transaction, the fee will be deposited into an account maintained by the Adviser at a bank or banks having the qualifications prescribed in section 26(a)(l) of the 1940 Act, and the account will earn a competitive rate of interest that will also be divided pro rata among the Participants based on the amount they invest in such Co-Investment Transaction. No Affiliated Entity, Regulated Fund, or any of their affiliated persons will accept any compensation, remuneration or financial benefit in connection with a Regulated Fund’s participation in a Co-Investment Transaction, except: (i) to the extent permitted by Section 17(e) or 57(k) of the 1940 Act; (ii) as a result of either being a Participant in the Co-Investment Transaction or holding an interest in the securities issued by one of the Participants; or (iii) in the case of an Adviser, investment advisory compensation paid in accordance with investment advisory agreement(s) with the Regulated Fund(s) or Affiliated Entity(ies).

 

 

14Section 57(o) defines the term “required majority,” in relevant part, with respect to the approval of a proposed transaction, as both a majority of a BDC’s directors who have no financial interest in the transaction and a majority of such directors who are not interested persons of the BDC. In the case of a Regulated Fund that is not a BDC, the Board members that constitute the Required Majority will be determined as if such Regulated Fund were a BDC subject to Section 57(o) of the 1940 Act.
  
15Section 57(f) provides for the approval by a Required Majority of certain transactions on the basis that, in relevant part: (i) the terms of the transaction, including the consideration to be paid or received, are reasonable and fair to the shareholders of the BDC and do not involve overreaching of the BDC or its shareholders on the part of any person concerned; (ii) the proposed transaction is consistent with the interests of the BDC’s shareholders and the BDC’s policy as recited in filings made by the BDC with the Commission and the BDC’s reports to shareholders; and (iii) the BDC’s directors record in their minutes and preserve in their records a description of the transaction, their findings, the information or materials upon which their findings were based, and the basis for their findings.
  
16Expenses of an individual Participant that are incurred solely by the Participant due to its unique circumstances (such as legal and compliance expenses) will be borne by such Participant.
  
17Applicants are not requesting and the Commission is not providing any relief for transaction fees received in connection with any Co-Investment Transaction.

 

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5.            Co-Investment Policies. Each Adviser (and each Affiliated Entity that is not advised by an Adviser) will adopt and implement policies and procedures reasonably designed to ensure that: (i) opportunities to participate in Co-Investment Transactions are allocated in a manner that is fair and equitable to every Regulated Fund; and (ii) the Adviser negotiating the Co-Investment Transaction considers the interest in the Transaction of any participating Regulated Fund (the “Co-Investment Policies”). Each Adviser (and each Affiliated Entity that is not advised by an Adviser) will provide its Co-Investment Policies to the Regulated Funds and will notify the Regulated Funds of any material changes thereto.18

 

6.            Dispositions:

 

(a)Prior to any Disposition19 by an Affiliated Entity of a security acquired in a Co-Investment Transaction, the Adviser to each Regulated Fund that participated in the Co-Investment Transaction will be notified and each such Regulated Fund given the opportunity to participate pro rata based on the proportion of its holdings relative to the other Affiliated Entities participating in such Disposition.

 

(b)Prior to any Disposition by a Regulated Fund of a security acquired in a Co-Investment Transaction, the Required Majority will take the steps set forth in Section 57(f) of the 1940 Act, unless: (i) each Affiliated Entity holding the security participates in the Disposition in approximate proportion to its then-current holding of the security; or (ii) the Disposition is a sale of a Tradable Security.20

 

7.            Board Oversight

 

(a)Each Regulated Fund’s directors will oversee the Regulated Fund’s participation in the co-investment program in the exercise of their reasonable business judgment.

 

(b)Prior to a Regulated Fund’s participation in Co-Investment Transactions, the Regulated Fund’s Board, including a Required Majority, will: (i) review the Co-Investment Policies, to ensure that they are reasonably designed to prevent the Regulated Fund from being disadvantaged by participation in the co-investment program; and (ii) approve policies and procedures of the Regulated Fund that are reasonably designed to ensure compliance with the terms of the Order.

 

(c)At least quarterly, each Regulated Fund’s Adviser and chief compliance officer (as defined in Rule 38a-l(a)(4)) will provide the Regulated Fund Boards with reports or other information requested by the Board related to a Regulated Fund’s participation in Co-Investment Transactions and a summary of matters, if any, deemed significant that may have arisen during the period related to the implementation of the Co-Investment Policies and the Regulated Fund’s policies and procedures approved pursuant to (b) above.

 

 
18The Affiliated Entities may adopt shared Co-Investment Policies.
  
19“Disposition” means the sale, exchange, transfer or other disposition of an interest in a security of an issuer.
  
20

“Tradable Security” means a security which trades: (i) on a national securities exchange (or designated offshore securities market as defined in Rule 902(b) under the Securities Act of 1933, as amended) and (ii) with sufficient volume and liquidity (findings which are to be made in good faith and documented by the Advisers to any Regulated Funds) to allow each Regulated Fund to dispose of its entire remaining position within 30 days at approximately the price at which the Regulated Fund has valued the investment.

 

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(d)Every year, each Regulated Fund’s Adviser and chief compliance officer will provide the Regulated Fund’s Board with reports or other information requested by the Board related to the Regulated Fund’s participation in the co-investment program and any material changes in the Affiliated Entities’ participation in the co-investment program, including changes to the Affiliated Entities’ Co-Investment Policies.

 

(e)The Adviser and the chief compliance officer will also notify the Regulated Fund’s Board of a compliance matter related to the Regulated Fund’s participation in the co-investment program and related Co-Investment Policies or the Regulated Fund’s policies and procedures approved pursuant to (b) above that a Regulated Fund’s chief compliance officer considers to be material.

 

8.            Recordkeeping. All information presented to the Board pursuant to the order will be kept for the life of the Regulated Fund and at least two years thereafter, and will be subject to examination by the Commission and its Staff. Each Regulated Fund will maintain the records required by Section 57(f)(3) as if it were a business development company and each of the Co-Investment Transactions were approved by the Required Majority under Section 57(f).21

 

9.            In the event that the Commission adopts a rule under the 1940 Act allowing co-investments of the type described in this Application, any relief granted by the Order will expire on the effective date of that rule.

 

IV.STATEMENT IN SUPPORT OF RELIEF REQUESTED

 

Applicants submit that allowing the Co-Investment Transactions described by this Application is justified on the basis of (i) the potential benefits to the Regulated Funds and their respective shareholders and (ii) the protections found in the terms and conditions set forth in this Application.

 

A.Potential Benefits to the Regulated Funds and their Shareholders

 

Section 57(a)(4) and Rule 17d-1 (as applicable) limit the ability of the Regulated Funds to participate in attractive co-investment opportunities under certain circumstances. If the relief is granted, the Regulated Funds should: (i) be able to participate in a larger number and greater variety of investments, thereby diversifying their portfolios and providing related risk-limiting benefits; (ii) be able to participate in larger financing opportunities, including those involving issuers with better credit quality, which otherwise might not be available to investors of a Regulated Fund’s size; (iii) have greater bargaining power (notably with regard to creditor protection terms and other similar investor rights), more control over the investment and less need to bring in other external investors or structure investments to satisfy the different needs of external investors; (iv) benefit from economies of scale by sharing fixed expenses associated with an investment with the other Participants; and (v) be able to obtain better deal flow from investment bankers and other sources of investments.

 

 

21If a Regulated Fund enters into a transaction that would be a Co-Investment Transaction pursuant to this Order in reliance on another exemptive order instead of this Order, the information presented to the Board and records maintained by the Regulated Fund will expressly indicate the order relied upon by the Regulated Fund to enter into such transaction.

 

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B.Shareholder Protections

 

Each Co-Investment Transaction would be subject to the terms and conditions of this Application. The Conditions are designed to address the concerns underlying Sections 17(d) and 57(a)(4) and Rule 17d-1 by ensuring that participation by a Regulated Fund in any Co-Investment Transaction would not be on a basis different from or less advantageous than that of other Participants. Under Condition 5, each Adviser (and each Affiliated Entity that is not advised by an Adviser) will adopt and implement Co-Investment Policies that are reasonably designed to ensure that (i) opportunities to participate in Co-Investment Transactions are allocated in a manner that is fair and equitable to every Regulated Fund; and (ii) the Adviser negotiating the Co Investment Transaction considers the interest in the Transaction of any participating Regulated Fund. The Co-Investment Policies will require an Adviser to make an independent determination of the appropriateness of a Co-Investment Transaction and the proposed allocation size based on each Participant’s specific investment profile and other relevant characteristics.

 

V.PRECEDENTS

 

The Commission has previously issued orders permitting certain investment companies subject to regulation under the 1940 Act and their affiliated persons to be able to participate in Co-Investment Transactions (the “Existing Orders”).22 Similar to the Existing Orders, the Conditions described herein are designed to mitigate the possibility for overreaching and to promote fair and equitable treatment of the Regulated Funds. Accordingly, the Applicants submit that the scope of investor protections contemplated by the Conditions are consistent with those found in the Existing Orders. 

 

 

22See, e.g., FS Credit Opportunities Corp., et al. (File No. 812-15706), Release No. IC-35520 (April 3, 2025) (notice), Release No. IC-35561 (April 29, 2025) (order); Sixth Street Specialty Lending, Inc. et al. (File No. 812-15729), Release No. IC-35531 (April 10, 2025) (notice), Release No. IC-35570 (May 6, 2025) (order); Blue Owl Capital Corporation, et al. (File No. 812-15715), Release No. IC-35530 (April 9, 2025) (notice), Release No. IC-35573 (May 6, 2025) (order); BlackRock Growth Equity Fund LP, et al. (File No. 812-15712), Release No. IC-35525 (April 8, 2025) (notice), Release No. IC- 35572 (May 6, 2025) (order).

 

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VI.PROCEDURAL MATTERS

 

A.Communications

 

Please address all communications concerning this Application, the Notice and the Order to:

 

Will Majeski, Esq.

Deputy General Counsel

Yieldstreet Alternative Income Fund Inc.

300 Park Avenue, 15th Floor

New York, NY 10022

Telephone: (844) 943-5378

 

Please address any questions, and a copy of any communications, concerning this Application, the Notice, and the Order to:

 

Nicole Simon

Stradley Ronon Stevens & Young, LLP

100 Park Avenue, Suite 2000

New York, NY 10017

Telephone: (212) 812-4137

 

B.Authorizations

 

The filing of this Application for the Order sought hereby and the taking of all acts reasonably necessary to obtain the relief requested herein was authorized by the Board of each Existing Regulated Fund pursuant to resolutions duly adopted by the Board. Copies of the resolutions are provided below.

 

Pursuant to Rule 0-2(c), Applicants hereby state that each Existing Regulated Fund and Existing Affiliated Fund have authorized to cause to be prepared and to execute and file with the Commission this Application and any amendment thereto for an order pursuant to Section 57(i) and Rule 17d-l permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) and Rule 17d-l. The person executing the Application on behalf of the Applicants being duly sworn deposes and says that he has duly executed the Application for and on behalf of the applicable entity listed; that he is authorized to execute the Application pursuant to the terms of an operating agreement, management agreement or otherwise; and that all actions by members, directors or other bodies necessary to authorize each such deponent to execute and file the Application have been taken.

 

The Applicants have caused this Application to be duly signed on their behalf on the 11th day of July, 2025.

 

  YIELDSTREET ALTERNATIVE INCOME FUND INC.
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

11

 

 

  YIELDSTREET INC.
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YIELDSTREET HOLDINGS LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YIELDSTREET MANAGEMENT, LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS ALTNOTES I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS ALTNOTES II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS ALTNOTES III LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS BP CML I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS EH PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

12

 

 

  YS IVC REL I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS IVC REL II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS PP REQ II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS LP PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS PRG REL I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS AVTR REL XIX LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS OCT PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS OCT PBC III LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

13

 

 

  YS TF SD I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS ATF I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer
   
  YS PC UPG I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

YS-HP-S JV Corp.

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

YS PP REQ I, LLC

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

YS PP REQ II P, LLC

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YIELDSTREET ALTERNATIVE INCOME FUND INC., that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YIELDSTREET ALTERNATIVE INCOME FUND INC.
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YIELDSTREET INC., that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YIELDSTREET INC.
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

14

 

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YIELDSTREET HOLDINGS LLC, that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YIELDSTREET HOLDINGS LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YIELDSTREET MANAGEMENT, LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YIELDSTREET MANAGEMENT, LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS ALTNOTES I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS ALTNOTES I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

15

 

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS ALTNOTES II LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS ALTNOTES II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS ALTNOTES III LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS ALTNOTES III LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS BP CML I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS BP CML I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS EH PBC I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

   
  YS EH PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

16

 

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS IVC REL I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS IVC REL I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS IVC REL II LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS IVC REL II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS PP REQ II LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS PP REQ II LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS LP PBC I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS LP PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

17

 

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS PRG REL I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS PRG REL I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS AVTR REL XIX LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS AVTR REL XIX LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS OCT PBC I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

   
  YS OCT PBC I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS OCT PBC III LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS OCT PBC III LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

18

 

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS TF SD I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS TF SD I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS ATF I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS ATF I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS PC UPG I LLC that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

  YS PC UPG I LLC
   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS-HP-S JV Corp., that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

 

YS-HP-S JV Corp.

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS PP REQ I, LLC, that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

 

YS PP REQ I, LLC

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

VERIFICATION

 

The undersigned states that he has duly executed the foregoing Application for and on behalf of YS PP REQ II P, LLC, that he is an Authorized Person of such entity and that all action by officers, directors, and other bodies necessary to authorize deponent to execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief.

 

 

YS PP REQ II P, LLC

   
  By: /s/ Ted Yarbrough
  Name: Ted Yarbrough
  Title: Chief Investment Officer

 

 

19

 

 

EXHIBIT A

 

Resolutions of Board of Directors of Yieldstreet Alternative Income Fund Inc.

 

Approval of Filing Section 17(d) Application for Co-Investment Relief

 

WHEREAS, the Board deems it is advisable and in the best interest of the Fund to file with the U.S. Securities and Exchange Commission (the “Commission”) an application for an order pursuant to Sections 17(d) and 57(i) of the Investment Company Act of 1940, as amended (the “1940 Act”), and Rule 17d-1 promulgated thereunder (the “Application”), to authorize the entering into of certain joint transactions that otherwise may be prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1 promulgated thereunder.

 

NOW, THEREFORE, BE IT RESOLVED, that the officers of YieldStreet Management, LLC and the Fund be, and each of them hereby is, authorized and directed on behalf of the Fund and in its name and on behalf of the Fund, to prepare, execute, and cause to be filed with the Commission an Application for an Order of Exemption, substantially in the form attached hereto as Exhibit A, and any amendments thereto, pursuant to Section 17(d) of the 1940 Act, and Rule 17d-l promulgated under the 1940 Act, authorizing certain joint transactions that otherwise may be prohibited by Section 17(d) of the 1940 Act; and it is further

 

RESOLVED, that the officers of the Fund be, and each of them hereby is, authorized and directed to take such further action and execute such other documents as such officer or officers shall deem necessary or advisable in order to effectuate the intent of the foregoing resolution; and it is further

 

RESOLVED, that any and all actions previously taken by the Fund or any of its directors or officers in connection with the actions contemplated by the foregoing resolutions be, and each of them hereby is, ratified, confirmed, approved and adopted in all respects as and for the acts and deeds of the Fund.

 

20

 

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