Cerulli: Adviser Alternative Allocations to Grow $2 Trillion as BDC-to-REIT Rotation Continues

U.S. advisers are on pace to add $2 trillion in alternative-investment assets over the next five years, according to new research from Cerulli Associates. The forecast arrives with survey findings that match a rotation AltsWire has reported from the redemption side for much of 2026: nontraded business development company (BDC) growth moderating while nontraded real estate investment trusts (REITs)  draw renewed adviser interest.

Advisers currently hold an estimated $2.2 trillion in less-than-fully-liquid private capital, according to the report, The Cerulli Report—U.S. Private Markets 2026: Scaling Retail Access. Cerulli attributes continued growth to the ongoing buildout of interval fund solutions, broader adoption of other semi-liquid structures, and the streamlined access offered by alternative asset-allocation models. Combining the current base with the five-year growth estimate implies roughly $4.2 trillion in adviser-owned alternative assets by the early 2030s – an AltsWire calculation from the two figures Cerulli reported, not a total the firm stated.

The asset managers Cerulli surveyed pointed to several forces behind the growth. Ninety-three percent cited greater availability and access to alternative products as a significant driver over the next three years, the highest-rated factor in the survey. Eighty percent cited the growing importance of private markets generally, and smaller majorities pointed to advisers’ need to demonstrate value to clients and demand for income-generating strategies.

A rotation Cerulli’s data now confirms

Cerulli’s report found nontraded BDC growth has moderated after a rapid rise in assets, while nontraded REITs have begun to draw renewed interest from their investor base. The finding matches what AltsWire has tracked at the fund level for most of the year. Nontraded REIT fundraising climbed more than 20% year-over-year through the first half of 2026, and the sector has now posted six consecutive quarters of positive net asset value (NAV) REIT returns.

Robert A. Stanger & Co. has described the pattern as capital rotating toward hard-asset strategies as nontraded REIT performance and adviser confidence recover from the redemption cycle that began in 2022. The nontraded BDC sector, meanwhile – which grew from $3.5 billion in capital formation in 2020 to more than $63 billion in 2025 – has shown signs of entering a comparable liquidity cycle, with redemption rates as a share of beginning-of-quarter NAV climbing sharply late last year, a pattern AltsWire has compared directly to the earlier REIT liquidity cycle.

Nontraded BDC sponsors met nearly $5.9 billion in redemption requests in the second quarter of 2026 alone, bringing year-to-date redemptions above $12.7 billion, even as fundraising across the category continued to slow.

Interval funds keep pulling ahead

Interval funds remain the preferred vehicle for scaling private-market access, according to the report. Assets across the category reached approximately $132 billion across 147 funds by year-end 2025, with asset growth outpacing growth in fund count – 33% versus 25% – a sign that assets remain concentrated in the category’s largest funds. Cerulli found 79% of surveyed asset managers already offer interval funds, with only 3% saying they have no plans to develop the structure.

The trajectory builds on AltsWire’s own tracking of the category, which counted 122 active interval funds managing $106.4 billion as of June 2025.

Wholesalers still do the selling

Independent registered investment advisers (RIAs) remain the channel managers most want to reach, with 93% of surveyed managers naming the segment a top-five distribution opportunity – more than any other channel, according to Cerulli. Yet the report found alternative investments remain largely sold rather than bought: 94% of managers said they rely on their own wholesalers for distribution, and asset managers rated specialist and wholesaler meetings more effective for adviser education than white papers or conference attendance.

“Traditional asset managers are seeking differentiated capabilities that can enhance their product offerings,” said Daniil Shapiro, director at Cerulli, in the report. Private capital managers, Shapiro added, often lack the retail distribution scale of larger asset managers, making partnerships between the two increasingly central to reaching investors beyond the ultra-high-net-worth segment.

With nontraded BDC redemption activity still elevated entering the third quarter and interval fund development continuing across the industry, the rotation Cerulli describes from the survey side is one AltsWire will keep tracking from the fund level as the year continues.

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