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Stanger Estimates Alts Will Raise More Than $110 Billion New Capital in 2024

Alternative investment fundraising totaled nearly $47.6 billion through May, led by non-traded business development companies at an estimated $14.9 billion, interval funds at $11.4 billion and other private placements, including infrastructure and private equity offerings, at $8.7 billion.

Non-traded BDC fundraising is up nearly 178% as compared to this time last year while interval fund fundraising is up nearly 58%, respectively. Private placement real estate investment trusts continue to gain in popularity with $1.6 billion raised year-to-date, which exceeds the total raised for the full year in 2023.

“Investment managers are transforming their product structures and offerings to meet investor demands for higher yields and different investment strategies. We expect to see the current transition from public offerings to private placements – due in great part to a simpler regulatory environment – to continue for the remainder of year,” said Kevin T. Gannon, chairman of Robert A. Stanger & Co., Inc.

Public non-traded REITs reported $2.6 billion of fundraising year-to-date, with $403 million being raised in May. Blackstone leads fundraising through May with $904 million, followed by Ares Management Corporation with $642.8 million, and LaSalle Investment Management ($214.5 million). FS Investments ($212.9 million) and Apollo Global Management ($177.9 million) round out the list of top five fundraising sponsors.

In addition, heightened levels of redemption activity continue in the public net asset value REIT space. In May, Blackstone’s BREIT reported that despite requests for redemptions being down 70% from January 2023, they still exceeded the 2% of monthly NAV limit. Stanger expects that the redemption overhang will continue to drag on net fundraising for most of 2024.

Non-traded business development companies raised approximately $14.9 billion year-to- date through May, led by Blackstone with $4.7 billion raised. Blue Owl Capital with $2.9 billion, Apollo Global Management ($2.4 billion), HPS Investment Partners ($1.5 billion estimated), and Ares Management Corporation ($1.4 million) round out the list of top 5 fundraising sponsors.

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 BDCs, 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 investments space year-to-date are Blackstone ($8.3 billion), Cliffwater ($5.6 billion), Blue Owl Capital ($4.1 billion), Ares Management Corporation ($4 billion), and Kohlberg Kravis Roberts & Co. ($3.8 billion).

“Stanger estimates that the alternative investment space will raise more than $110 billion of new capital in 2024,” said Gannon.

Private placement offerings of NAV REITs, BDCs, infrastructure and private equity investments continue to gain traction in 2024. Year-to-date through May, other private placements raised approximately $8.7 billion and private BDCs raised approximately $3 billion. The newly effective private equity offering by Blackstone, the Blackstone Private Equity Strategies Fund, has raised nearly $2.6 billion while KKR Infrastructure Conglomerate LLC and KKR Private Equity Conglomerate LLC combined raised almost $3.7 billion year-to-date.

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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