Annual Non-Traded Alts Fundraising Reaches $58 Billion, Led by BDCs and Interval Funds

Alternative investment fundraising totaled $57.8 billion year-to-date through October, led by non-traded business development companies at $15.8 billion, interval funds at $15.4 billion and non-traded real estate investment trusts at $9.4 billion, according to investment bank Robert A. Stanger & Co. Inc.

“While retail investors continue to shift investments away from non-traded REITs to interval funds, BDCs and private placements, redemption activity in NAV REITs remained elevated at $4.6 billion for the third quarter,” said Kevin T. Gannon, chairman of Robert A. Stanger & Co. Inc. “NAV REITs have met nearly $14 billion of redemption requests year to date through September and should be praised for their commitment to providing liquidity to investors at levels never seen before.”

Stanger’s survey of top sponsors tracks fundraising of all alternative investments offered via the retail pipeline including publicly registered non-traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, Delaware statutory trusts, opportunity zone and other private placement offerings.

The top five fundraisers in the non-traded alternative investment space through October are Blackstone ($11.5 billion), Blue Owl Capital ($6.2 billion), Cliffwater ($6.1 billion), Kohlberg Kravis Roberts & Co. ($3.6 billion) and Ares Management Corporation ($3.1 billion).

“T. Rowe Price/Oak Hill kicked off fundraising efforts with nearly $480 million of capital formation recorded. Strong performance and fundraising by non-traded BDCs have contributed to the aggregate NAV of the space surpassing $48 billion while NAV REITs have contracted to below $100 billion from a peak of nearly $110 billion in January 2023.” according to Randy Sweetman, executive managing director of Robert A. Stanger & Co. Inc.

The alternative investments tracked by Stanger raised $19.1 billion in the most recent three- month period lead by non-traded BDCs, and interval funds. Private placements continue to gain traction in fundraising including the KKR Infrastructure Conglomerate LLC and KKR Private Equity Conglomerate LLC that have raised approximately $3.3 billion year-to-date through October.

Year-to-date non-traded REIT’s have raised approximately $9.4 billion. Blackstone leads 2023 fundraising with $6.2 billion (inclusive of a $4.5 billion investment by the University of California), followed by FS Investments with $662.1 million, LaSalle Investment Management ($470.1 million), Ares ($415.9 million) and Apollo ($374.8 million) round out the list of top five fundraising sponsors.

Year-to-date non-traded perpetual-life business development companies have raised approximately $15.8 billion, led by Blackstone with $5.3 billion raised. Blue Owl with $3.4 billion, Apollo ($1.7 billion), Ares ($1.4 billion) and HPS Investment Partners ($1.2 million through September) round out the list of top five fundraising sponsors.

Robert A. Stanger & Co., Inc., founded in 1978, is an investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.

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