Interval Funds Lead Alternative Investment Fundraising Through August
Alternative Investment fundraising totaled $44.3 billion year-to-date through August, led by interval funds at $12.1 billion, private placements at $11.3 billion, non-traded business development companies at nearly $11.0 billion and non-traded real estate investment trusts at $8.6 billion, according to the latest data provided by investment bank Robert A. Stanger & Co.
Non-traded business development companies fundraising hit $1.4 billion in August alone, again led by Blackstone Private Credit Fund (“BCRED”) with $549 million raised during the month.
“Retail investors are revising their allocation strategy to interval funds, private placements (including infrastructure funds) and non-traded BDCs and away from non-traded REITs which have dominated the space over the last seven years,” said Kevin T. Gannon, chairman of Stanger.
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 fundraisers in the alternative investment space year to date, are Blackstone ($9.6 billion), Cliffwater ($4.5 billion), Blue Owl Capital ($4.4 billion), Kohlberg Kravis Roberts & Co. ($2.7 billion), Ares Management Corporation ($2.2 billion), Apollo Global Management ($1.9 billion), PIMCO (estimated $1.0 billion), Brookfield Asset Management (estimated $955 million), Goldman Sachs ($935 million), Variant Investments ($777 million), FS Investments ($750 million), HPS Investment Partners ($711 million through July), LaSalle Investment Management ($683 million), Golub Capital ($650 million) and Bluerock Capital Markets ($620 million) round out the list of top 15 sponsors in capital formation though August.
“In addition to several non-traded BDC newcomers ramping up their fundraising efforts we continue to see many sponsors experiencing tremendous success raising capital through private placements,” said Randy Sweetman, executive managing director of Stanger. “Notably, KKR has raised nearly $2 billion year-to-date in their infrastructure and private equity conglomerate offerings combined.”
The alternative investments tracked by Stanger raised $17.7 billion in the most recent three-month period led by non-traded business development companies and interval funds, with a “strong showing” from private placements including the Goldman Sachs Private Credit Corp. that has raised approximately $890 million year-to-date through August.
Non-traded REITs, which have been among the most popular category of alternative investment in recent years, lag behind thus far in 2023, having raised approximately $8.6 billion through August. Blackstone leads 2023 fundraising among non-traded REIT sponsors with $5.9 billion (inclusive of a $4.5 billion University of California investment), followed by FS Investments with $585.3 million, LaSalle Investment Management ($387.9 million), Ares ($324.1 million) and Apollo ($297.8 million) round out the list of top five fundraising sponsors.
Year-to-date non-traded perpetual-life business development companies have raised approximately $11.0 billion, led by Blackstone with $3.7 billion raised. Blue Owl with $2.5 billion, Ares ($1.1 billion), Apollo ($1.0 billion) and Brookfield ($838.5 million through July) 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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