According to WealthManagement, Robert A. Stanger & Co. has raised its forecast for 2024 alternative investment fundraising in the retail channel from $115 billion to $120 billion. This adjustment follows a surge in investments, particularly in business development companies (BDCs), interval funds, and private real estate investment trusts (REITs).
According to Kevin T. Gannon, Chairman of Robert A. Stanger & Co., investors have already committed $36 billion to BDCs and $9 billion to both public and private REITs this year. Through October, non-traded BDCs raised approximately $29.3 billion, marking an 82 percent increase from the same period in 2023. Analysts at Stanger attribute this popularity among retail investors to attractive dividend yields, which currently average 10.6 percent.
Interval funds have also shown significant growth, raising $22.9 billion through October—a 13.4 percent increase from all of 2023. Private REITs experienced a sharp rise in fundraising, hitting $3.9 billion year-to-date, a 143 percent jump compared to 2023 figures. Private BDCs saw strong performance as well, with $6.8 billion raised so far, nearly doubling last year's total.
While non-traded REIT fundraising dropped 47 percent year over year to $5 billion, redemption requests have significantly decreased. Stanger reports a 43 percent reduction in redemption requests for non-traded NAV REITs in the third quarter compared to the previous quarter and a 21 percent decline from the same period last year. Blackstone's BREIT played a notable role, meeting all investor redemption requests and returning $1.7 billion to investors in the third quarter—down from $3 billion per quarter since Q3 2022.
Stanger's analysis relies on surveys of leading sponsors in the alternative investment sector, monitoring fundraising for all products within the retail channel, according to WealthManagement.
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