Nontraded BDC Outflows Exceed Inflows for First Time as Q1 Fundraising Drops 59% Year Over Year
Publicly registered nontraded business development companies saw outflows exceed inflows for the first time in the first quarter of 2026, with a sharp decline in fundraising. Q1 2026 gross sales totaled $4.9 billion – down 46% from Q4 2025 and 59% from Q1 2025 – while sponsors met $6.9 billion in redemption requests, according to the latest analysis from investment banking firm Robert A. Stanger & Company Inc.
Nontraded BDC performance remained resilient compared to public market benchmarks. The Stanger NL BDC Total Return Index was essentially flat in Q1 at -0.03%, marking its first negative quarterly return since Q2 2022. Over the trailing 12 months, the Stanger Index returned 6.2%, compared with a 14% decline for the S&P BDC Total Return Index. The S&P BDC Total Return Index declined 10.1% in Q1 alone.
As AltsWire has closely covered, redemption activity has been building since late 2025. The $6.9 billion in Q1 redemptions represents a record level of liquidity provided by NAV BDC sponsors in a single quarter and continues a trend of a widening gap between investor demand to exit and new capital flowing in.
The $6.9 billion amount has been updated from the preliminary amount, $7.4 billion, previously referenced by AltsWire. The new amount excludes approximately $400 million invested by Blackstone and its employees into a feeder fund, thereby offsetting the repurchase amount requested from the feeder fund. The exclusion was made because the investment was not made within Blackstone fund’s repurchase program.
Despite elevated redemption activity, NAV BDCs have continued to provide liquidity without gating redemptions. Five NAV BDCs, including those sponsored by Blue Owl Capital and BlackRock, fulfilled Q1 redemption requests up to their quarterly caps and prorated the remaining requests. Two funds – Blackstone Private Credit Fund and Oaktree Strategic Credit Fund – exceeded the standard 5% quarterly repurchase limit to satisfy 100% of investor requests. More recently, Golub Capital Private Credit Fund reported Q2 2026 redemption requests of 8.5% of shares outstanding and intends to fulfill up to its 5% quarterly limit.
As redemption activity remains elevated, realized asset sales may test NAV marks and portfolio valuation discipline across the sector.
“The Stanger Liquidity Cycle is progressing as we anticipated,” said Kevin T. Gannon, chairman and chief executive officer of Stanger. “Fundraising has slowed, redemptions have risen, and for the first time, more capital left nontraded BDCs in a quarter than came in.”
“But the structures are functioning as designed: sponsors delivered a record level of liquidity in [the first quarter], and no NAV BDC has gated redemptions. As we saw with NAV [real estate investment trusts] in 2022, these vehicles were built to manage periods of elevated redemptions, and Q1 showed that the structure can absorb meaningful liquidity pressure,” added Gannon.
Performance leaders across key time periods are summarized in the table below.
The Stanger NL BDC Total Return Index measures the performance of nontraded BDCs on a quarterly basis. Stanger began calculating the index on Dec. 31, 2015, with a base of 100. Perpetually offered, nontraded BDCs that update their NAVs no less frequently than monthly and that have a minimum of one calendar quarter of performance are included in the index. As of Q1 2026, the index includes 24 BDCs with a total of 56 separate share classes.
Founded in 1978, Robert A. Stanger & Company is an investment banking firm providing advisory, valuation, and capital markets services to real estate investment trusts, partnerships, and related entities.
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