Stanger Increases 2024 Alts Capital Formation Estimate to $115 Billion

Alternative Investment fundraising totaled nearly $57.4 billion through June led by non-traded business development companies at an estimated $18 billion, interval funds at $13.6 billion and other private placements, including infrastructure and private equity offerings, at $10.3 billion. Non-traded BDC fundraising is up nearly 133% as compared to this time last year while non-traded real estate investment trust fundraising is down 61%, respectively. Capital formation in public non-traded REITs has contracted in part due to investors shifting toward private placement REITs. Private REITs have raised $2.5 billion year-to-date, which already exceeds the total raised for the full year in 2023.

“After a very strong first half of the year in alternative investment fundraising, we are increasing our estimate of capital formation in alternative investments by retail investors from $110 billion up to $115 billion in 2024,” said Kevin T. Gannon, chairman of Robert A. Stanger & Co., Inc.

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 investment space year-to-date are Blackstone ($9.6 billion), Cliffwater ($6.7 billion), Blue Owl Capital ($5.4 billion), Ares Management Corporation ($4.9 billion), and Kohlberg Kravis Roberts & Co. ($4.4 billion).

Public non-traded REITs reported $3.1 billion of fundraising year-to-date, with $421 million being raised in June. Blackstone leads fundraising year-to-date with nearly $1.1 billion, followed by Ares Management Corporation with $650.7 million, FS Investments ($245.3 million), Apollo Global Management ($227.4 million) and LaSalle Investment Management ($220.4 million) rounding 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 June, Blackstone’s BREIT reported that despite requests for redemptions being down 50% from May and down 85% from the January 2023 peak, redemptions still exceeded the 5% of NAV quarterly limit but were 100% satisfied by approval of its board of directors. Stanger expects that the redemption overhang will continue to drag on public NAV REIT net fundraising for the remainder of 2024.

Non-traded business development companies raised approximately $18 billion year-to-date through June, led by Blackstone with $5.8 billion raised. Blue Owl Capital with $3.6 billion, Apollo Global Management ($2.8 billion), HPS Investment Partners ($1.8 billion estimated) and Ares Management Corporation ($1.7 million) rounded out the list of top five fundraising sponsors.

“Fundraising in public and private business development companies has exploded in the first half of the year and is expected to continue with several newcomers, such as Kennedy Lewis and First Eagle, launching public offerings in June,” said Randy Sweetman, executive managing director of Stanger.

Private placement offerings of NAV REITs, BDCs, and infrastructure and private equity investments continue to gain traction in 2024. Year-to-date through June, other private placements raised approximately $10.3 billion and private BDCs raised approximately $3.5 billion. Kohlberg Kravis Roberts & Co. leads in overall private placement fundraising year-to-date with nearly $4.3 billion, followed by Blackstone with $2.9 billion, Blue Owl ($1.8 billion), Ares Management Corporation ($1.8 billion), and Goldman Sachs ($1.4 billion) rounding 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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