Alts Fundraising Hits $76.6B, Led by BDCs

Alternative investment fundraising reached $76.6 billion through August 2024, driven by a surge in non-traded BDCs, while non-traded REITs saw a 52% decline in capital raised.

September 27, 2024

Alternative investment fundraising totaled approximately $76.6 billion through August 2024, driven by non-traded business development companies (BDCs) at $23.7 billion, interval funds at $18.3 billion, and other private placements, including infrastructure and private equity, at $12.9 billion, according to Robert A. Stanger & Co., Inc. Fundraising for non-traded BDCs surged by nearly 111% year-over-year, while non-traded real estate investment trusts (REITs) experienced a significant drop of 52%.

Stanger had raised its 2024 capital formation estimate from $110 billion to $115 billion, and now expects to exceed that target, citing strong demand for higher-yield alternatives. " Fundraising in alternative investments through August has already surpassed the total raised in 2023, and we anticipate capital formation to exceed $115 billion dollars in 2024 as retail investors continue to seek alternatives generating higher yields," said Kevin T. Gannon, Stanger’s chairman.

The top sponsors in the alternative investment space include Blackstone ($11.9 billion), Cliffwater ($8.8 billion), Blue Owl Capital ($7.1 billion), Ares Management Corporation ($6.5 billion), and Kohlberg Kravis Roberts & Co. ($6.2 billion). Public non-traded REITs have raised $4.2 billion so far, with Blackstone leading at $1.4 billion.

Non-traded BDCs have been particularly successful, raising $23.7 billion year-to-date, with Blackstone, Blue Owl Capital, Apollo Global Management, Ares Management, and HPS Investment Partners as the top sponsors. Meanwhile, private placement offerings of NAV REITs, BDCs, and infrastructure investments have gained significant momentum, raising $12.9 billion year-to-date.

Stanger’s data reflects growing interest in private placement offerings, as investors seek out alternative, yield-focused investments across private equity, BDCs, and real estate. Founded in 1978, Stanger specializes in investment banking, advisory services, and capital formation for real estate and alternative investments.