Alt Fundraising Slips in January as Capital Rotates Away from BDCs
Business development companies (BDCs) led early-year capital formation with $3.2 billion, narrowly ahead of interval funds at $3.1 billion, followed by tender offer funds at $2.6 billion. But BDC momentum appears to be moderating. After a year-end slowdown and elevated redemption activity, BDC sales began 2026 down nearly 40% month-over-month and roughly 49% below their March 2025 peak of $6.2 billion, according to Robert A. Stanger & Company’s The Stanger Market Pulse.
Kevin T. Gannon, Chairman and CEO of Stanger, said that despite a record $63 billion of BDC capital raised in 2025, fourth-quarter trends suggested shifting conditions, including slower monthly inflows, rising redemptions and softer returns. He added that Stanger expects alternatives to enter a “hairpin turn,” with capital beginning to rotate away from private credit. The firm now projects roughly a 40% year-over-year decline in BDC fundraising for 2026, drawing parallels to the 65% contraction experienced by non-traded REITs between 2022 and 2023.
Meanwhile, non-traded REITs and Delaware statutory trusts (DSTs) showed renewed traction. January fundraising totaled $593 million for publicly registered non-traded REITs, $667 million for private placement REITs and $672 million for DSTs—a combined 23% increase year-over-year.
Stanger noted that while BDCs are navigating cyclical headwinds, innovative liquidity solutions, such as Blue Owl’s recent special distribution in lieu of tender offers, underscore the sector’s adaptability and long-term resilience.
