As that table shows, while the platform has underperformed the stock market, it has outperformed a key real estate benchmark. Further, it has delivered positive returns each year, with relatively low volatility. That makes it an ideal option for those seeking an investment with low correlation to the stock market.
The platform's solid performance is due to its relatively conservative investment approach. While "some may call this approach too conservative," Fundrise wrote in its 2019 year-end letter to investors, "our belief is that the investors who have achieved consistent success spanning multiple decades tend to spend more time protecting against the downside than they do regretting the upside they may have missed." That focus on downside protection has paid off as the platform as a whole has not delivered a down year in its history and was resilient in a challenging 2020.
One other factor that makes Fundrise stand out is that its parent company, Rise Companies, has offered stock for sale -- but only to those who've invested with Fundrise -- to raise capital. So even though its stock isn't publicly traded, it's still publicly held and must file regular reports of its financial condition with the SEC.
Sales of Fundrise stock through the company's IPO -- internet public offering, not initial public offering -- have helped the company raise substantial capital to fund its growth. Moreover, the company has increased the per-share price every time it has updated this ongoing offering.
But before you consider participating in it, be forewarned: Unlike the Fundrise REITs, there is no redemption plan for Rise Companies stock. So be prepared to own a stake in the company for potentially many years before you have any opportunity to cash out of your investment.
One of the main things about Fundrise that makes it appealing is its management. The CEO, Ben Miller, is also a co-founder and one of the largest investors in the company. Miller, along with other executives and several members of the Miller family, owns a controlling stake in Rise Companies.
There are a few positives to this. First, we have executives -- and family members of the executives -- whose interests are aligned with investors in Rise Companies. Moreover, since the business operators have control, there's less risk of a large outside investor, such as a venture capital fund, forcing management to act in a way that may not be aligned with the company's best interests.
On the other hand, there's some risk to this structure, particularly since Fundrise makes most of its money from lending fees, not asset management fees. What's in the best interest of the company itself -- and its owners -- isn't necessarily what is in the best interest of investors in Fundrise's various investment products, at least in the short-term.
Yet, there's one more aspect of management that must be considered: experience in real estate development. The Miller family has a multiple-decade track record of developing commercial real estate, and in every part of the real estate and economic cycle. This experience should prove valuable in navigating the real estate cycle in the future.