Illiquid and semi-liquid alternative investment fundraising totaled approximately $87.5 billion through September 2024 led by non-traded business development companies at an estimated $26.4 billion; interval funds at $20.6 billion; and other private placements, including infrastructure and private equity offerings, at $16 billion. Non-traded BDC fundraising is up nearly 92% as compared to this time last year, while non-traded real estate investment trust fundraising is down 49%, respectively. The industry continues to transform as investors shift their portfolio allocations to private placement offerings, infrastructure, private equity, and higher-yielding, credit-focused investments.
“Fundraising in both private and public business development companies continues to dominate in the space, and we anticipate capital formation in the public non-traded BDCs to exceed $34 billion in 2024 as retail investors continue to seek higher yields,” 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 stocks, Delaware statutory trusts, opportunity zone funds, private BDCs, private REITs, and other private placement offerings. The top fundraisers in the alternative investment space year-to-date are Blackstone ($13.2 billion), Cliffwater ($10 billion), Blue Owl Capital ($9.4 billion), Ares Management Corporation ($7.5 billion), and Kohlberg Kravis Roberts & Co. ($7.1 billion).
Public non-traded REITs reported nearly $4.5 billion of fundraising year-to-date, with $365 million being raised in September. Blackstone leads fundraising year-to-date with nearly $1.5 billion, followed by Ares Management Corporation with $1 billion, Apollo Global Management ($351.6 million), FS Investments ($336.9 million) and LaSalle Investment Management ($302.2 million) rounding out the list of the top five fundraising sponsors.
This latest report from Stanger follows closely with insights shared during Gannon’s recent appearance at ADISA’s 2024 Annual Conference & Trade Show. There, he told the group, “yield dominates.” Stanger also increased its alts capital formation earlier this year from $110 billion to $115 billion.
Stanger stated that it expects that fundraising in public non-traded REITs will remain muted for the remainder of the year as private placement REITs gain in popularity. As Stanger previously reported, Ares Management closed both of their public NAV REIT offerings and commenced fundraising in perpetual private placement offerings of the REITs in August. The initial combined offering closing of $7.1 million in the Ares private offerings added to the nearly $3.5 billion raised year-to-date by private REITs.
Non-traded BDCs raised approximately $26.4 billion year-to-date through August, led by Blackstone with $8.2 billion raised. Blue Owl Capital with $5.1 billion, Apollo Global Management ($4 billion), Ares Management Corporation ($2.8 billion), and HPS Investment Partners ($2.5 billion estimated) rounded out the list of the top five fundraising sponsors.
“Non-traded BDC offerings continue to attract new entrants to the space with Alliance Bernstein being the latest to launch a public business development company,” said Randy Sweetman, executive managing director of Stanger.
Private placement offerings of NAV REITs, BDCs, infrastructure and private equity investments continue to gain traction in 2024. Year-to-date through September, other private placements raised approximately $16 billion, and private BDCs raised $6.3 billion. Kohlberg Kravis Roberts & Co. leads in overall private placement fundraising year-to-date with nearly $6.8 billion, followed by Blue Owl with $4.3 billion, Blackstone ($3.5 billion), Ares Management Corporation ($2.6 billion), and Goldman Sachs ($2.3 billion) rounding out the top five fundraising sponsors’ list.
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.
Click here to visit The DI Wire directory page.
Read the full article here
