Investment banking firm Robert A. Stanger & Co. has moved its alternative investment fundraising projection in the retail channel to full-year 2024 from 115 billion dollars to 120 billion dollars. The change was mainly driven by a strong inflow of funds into business development companies, mutual funds and private REITs.
“Investors have already committed $36 billion to BDCs and $9 billion to public and private REITs this year,” Kevin T. Gannon, chairman of Robert A. Stanger & Co., said in a statement.
Year-to-date through October, effective and currently offered non-traded BDCs raised approximately $29.3 billion, an 82% increase over the same time in 2023. According to Stanger analysts, one reason for the popularity of these vehicles with retail investors is high dividend levels, which average around 10.6%. Just two firms—Blackstone and Blue Owl Capital—are currently responsible for 49.7% of the fundraising market in this channel.
Over the same time period, fundraising for interim funds reached over $22.9 billion, a 13.4% increase from the 2023 total.
Private REITs experienced a 143% increase in fundraising year-to-date through October compared to the 2023 total, to $3.9 billion.
Private BDCs also performed strongly, with $6.8 billion in fundraising so far in 2024—a 99.5% increase from their total fundraising volume last year.
While fundraising for non-traded REITs, at $5 billion, fell 47% year over year, they have seen a reducing redemption requests. Stanger estimates that in the third quarter, redemptions for non-traded NAV REITs were down 43% quarter over quarter and 21% year over year.
“We are starting to see a reduction in the NAV REIT redemption queues that have built up over the past two years, particularly with Blackstone's BREIT satisfying all investor requests and returning $1.7 billion to investors in the third quarter compared to $3 billion dollars in the next quarter. again in the third quarter of 2022,” according to Gannon's statement.
Stanger bases his numbers on a survey of top sponsors in the alternative investment space that tracks fundraising for all alternative products offered through the retail channel.