Fundrise, an online real estate investment platform that has recently added early-stage venture funding (the Innovation Fund) as an option, has provided an update on platform performance during Q1 2023 and at a time when markets are flagging.
According to Fundrise, the average net return for the quarter across all accounts was a positive 0.59%. The Flagship Fund, Fundrise’s largest fund, delivered a net return of 0.56%, while the Income Fund delivered a 2.13% net return, supported by an average annualized dividend of 8.4%. Clearly, income is topping growth. Several of Fundrise’s funds, like the Growth eREIT III, is solidly in the negative column at a minus 2.37% for the quarter.
Fundrise said they believe their investors are “well positioned to take advantage of what we expect to be the coming opportunities that will emerge as we enter the final stages of the current economic downturn.”
As the thesis goes, Fundrise believes as rates move higher, credit becomes more expensive, and firms will be compelled to raise equity capital or wind things down. Of course, the Fed wants markets to slow to stomp out inflation, and the rate hikes have been gaining traction. But Fundrise notes there is light at the end of the tunnel, and for the prudent, as prices decline, the cycle will turn, and this moment is getting closer.
“For our investors who are able to afford it, we think the time to move into aggressive deployment mode is nearing and we intend to share our views on when and how best to take advantage of these opportunities with greater frequency going forward, regardless of whether that be on the Fundrise platform or not.”
While the “Great Deleveraging” has not yet finished, some pundits believe this will happen sooner than later. As for Fundrise, it will be interesting to hear their thoughts at some point in the near future.
