Stanger: BDC Fundraising Slows as Alts Raise $14.1B in January
Alternative investment fundraising for January 2026 totaled approximately $14.1 billion, a 27% drop from December 2025. Business development companies led early-year fundraising with $3.2 billion, narrowly surpassing interval funds at $3.1 billion, while tender offer funds followed at $2.6 billion.
After publicly registered and private placement BDCs saw a year-end slowdown in monthly fundraising and increased investor demand for redemptions, January sales declined nearly 40% compared with December 2025 and were down approximately 49% from the sector’s all-time monthly high of $6.2 billion raised in March 2025, according to investment banking firm Robert A. Stanger & Company Inc. “Despite a record-breaking $63 billion of BDC capital formation in 2025, we saw signs of a new market dynamic taking shape in Q4 – monthly sales slowed, redemptions accelerated, and total returns began to soften,” said Kevin T. Gannon, chairman and chief executive officer of Stanger.
“January data suggests this trend has continued into the new year, as the BDC sector seemingly begins to navigate a familiar path seen in non-traded [real estate investment trusts] during the 2022-2023 downturn. Just as we saw money flow away from REITs and into BDCs previously, Stanger believes alternatives are beginning to enter a hairpin turn with capital shifting away from private credit,” added Gannon.
With these shifts, Stanger is now forecasting an approximately 40% year-over-year decline in BDC capital formation for 2026 similar to the 65% year-over-year dip experienced by REITs from 2022 to 2023.
Fundraising in non-traded REITs and Delaware statutory trusts opened the year with January fundraising totaling $593 million for publicly registered non-traded REITs, $667 million for private placement REITs, and $672 million for DSTs. The total represents a 23% year-over-year jump from their January 2025 combined total.
Downturns have the ability to spur new solutions, Gannon continued.
“BREIT’s $4.5 billion deal with the University of California in 2023 provided liquidity during the REIT redemption surge and stabilized investor confidence. Innovative responses are already emerging for BDCs, with Blue Owl’s recent announcement of a special distribution equivalent to 30% of NAV in lieu of reinstating tender offers, signaling a shift in focus to accelerated investor liquidity.”
The top 20 sponsors by year-to-date gross fundraising are summarized in the table below.
“The ongoing dynamics in BDCs underscore the cyclical nature of alternatives, but the ability to meet redemptions through strategic measures has historically propelled growth and sustained resilience in the broader space,” noted Randy Sweetman, executive managing director at Stanger. “Across three of its BDCs, Blue Owl is selling $1.4 billion of direct lending investments at 99.7% of par value, as BDC sponsors work to meet the nearly 200% rise in redemption requests from Q3 to Q4 2025.”
Founded in 1978, Robert A. Stanger & Company is an investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts, and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.
Click here to visit the AltsWire directory page.
