Risk Disclosure
Comprehensive information about the risks of investing in alternative assets
Last updated: 9 February 2026
1. General Investment Risks
1.1 Capital at Risk
The value of investments can go down as well as up. You may receive back less than your original investment, or lose your entire investment. Losses can arise from asset performance, market conditions, issuer failure, valuation changes, currency movements, or external economic events.
1.2 Past Performance
Past performance is not a reliable indicator of future results. Alternative assets often show high historical returns because only successful exits are publicised; failed investments receive less attention, creating survivorship bias.
1.3 No Guarantees
We make no guarantees regarding:
- Investment returns (positive or negative)
- Income or distribution amounts
- Timeline to exit or maturity
- Availability of buyers on the transfer market
1.4 Concentration Risk
Alternative investments lack the diversification of public equity markets. A single investment failure can materially impact your portfolio. Diversify across multiple assets, managers, and geographies.
2. Illiquidity Risk
This is the single biggest risk of alternative investments.
2.1 What Illiquidity Means
Unlike public stocks, alternative assets cannot be sold quickly at a transparent price. Exit routes are limited: transfer to another verified investor (requires a willing buyer at a mutually agreed price), periodic redemption windows where offered (may be suspended or cancelled), or holding until the fund matures and distributes over its lifecycle (typically 5–10+ years).
2.2 The Transfer Market Is Not Guaranteed Liquidity
Haystack's transfer facility enables negotiation between investors, but there is no guarantee a buyer exists, or at what price. Positions may attract no bids, or bids materially below NAV.
2.3 Forced Hold Scenarios
Lock-up periods, minimum holding periods, cooling-off windows and compliance restrictions may prevent transfer even when a buyer exists. Fund lifecycles may be extended without your consent.
3. Valuation and Pricing Risk
NAV is an estimate produced by fund managers and administrators, typically monthly or quarterly. It may lag real market conditions and can decline sharply between valuations. Transfer market prices are negotiated between investors and may differ significantly from NAV.
4. Risks by Asset Class
- Private equity & venture capital — high failure rates, long hold periods, returns concentrated in few winners.
- Private credit — borrower default, interest-rate movements, recovery risk on collateral.
- Real estate — market cycles, tenant risk, refinancing risk, illiquid underlying assets.
- Infrastructure — construction and operational risk, regulatory change, long payback periods.
- LP interests (secondaries) — pricing opacity, information asymmetry, remaining commitment obligations.
5. Structural and Platform Risks
- Register structure — your ownership is recorded as electronic securities (Kryptowertpapiere) on a BaFin-licensed crypto securities register under the German eWpG; legal frameworks for tokenised securities continue to evolve.
- Smart contract risk — errors or vulnerabilities in on-chain code could affect the register or settlement.
- Cash token risk — platform cash (Ix) is a claim on segregated fiat held in the SPV vault account; bank failure or reconciliation errors could delay access.
- Platform risk — if Haystack ceased operating, orderly wind-down arrangements apply, but access to services could be interrupted.
- Regulatory and legal risk — changes to UK, German or EU regulation may affect the platform or your holdings.
6. What We Don't Provide
- Investment advice or personal recommendations
- Suitability assessments beyond the regulatory appropriateness test
- FSCS protection on investments
- Guaranteed liquidity, returns or exits
7. Who Should (and Shouldn't) Invest
Suitable only for investors who understand these risks, can bear losses, and can hold for the long term. If you may need your money back within the fund's expected life, or a loss would materially affect your circumstances, you should not invest.
8. How to Manage These Risks
- Diversify across assets, managers and asset classes
- Only allocate a sensible portion of your investable wealth to alternatives
- Read each fund’s Key Information Document and Prospectus before subscribing
- Seek independent financial advice if you are unsure
9. Questions
Contact support@haystack.investments for any questions about this disclosure.