Fundraising for alternative assets offered to retail investors totaled $47.56 billion in the year to May, according to a report by Robert A. Stanger & Co. The amount already accounts for more than half of the $76.2 billion in alternative fundraising achieved in 2023 and puts asset managers on pace to match or exceed 2022's $104.8 billion total. Stanger estimates that the alternative investment space will raise more than $110 billion in new capital by 2024.
Asset managers are at a record pace despite a marked decline in non-traded REIT fundraising, which peaked in 2022. Year-to-date non-traded REIT fundraising stood at 2.66 billion dollars, showing these vehicles were still struggling to catch on until year-round fundraising in 2023 ($10.22 billion) and 2022 ($33.2 billion). The slowdown in the segment has been largely driven by broader issues that have plagued commercial real estate over the past two years, driving interest to other asset classes.
Non-traded BDCs, meanwhile, accounted for the highest share of total volume in the first five months of 2023, with fundraising at $14.88 billion through May. Interval funds followed at $11.39 billion and various types of private placements, including infrastructure investments and private equity, at $8.71 billion.
At the same time, private placements in REITs totaled $1.62 billion year-to-date through May, on top of their full total of $1.4 billion in 2023.
“Investment managers are transforming their structures and product offerings to meet investor demands for higher yields and diverse investment strategies,” Robert A. Stanger Chairman Kevin T. Gannon said in a statement. “We expect the current transition from public offerings to private placements, largely due to a simpler regulatory environment, to continue for the remainder of the year.”
The top fundraisers in the alternative investment space year-to-date, according to Stanger, are Blackstone ($8.3 billion), Cliffwater ($5.6 billion), Blue Owl Capital ($4.1 billion), Ares Management Corporation ($4.0 billion) and Kohlberg Kravis Roberts & Co ($3.8 billion).
Private equity giant Blackstone ranks top in non-traded BDC fundraising and non-traded REIT categories year-to-date through May, at $4.7 billion and $904 million, respectively. The firm represented over 30% market share in both segments.
Other top fundraising sponsors in the non-traded BDC space included Blue Owl Capital, with $2.88 billion and 19.4% of the market, and Apollo Global Management, with $2.39 billion and 16.1% of the market.
In the non-traded REIT category, Blackstone's successor included Ares Management Corp., with $642 million and 24.1% market share, and LaSalle Investment Management, with $214 million and 8.1% market share.