Alternative Investments on Track to Top $1T by Late 2025: Stanger
The alternative investment industry is poised to surpass $1 trillion of cumulative capital formation in the 25 years ending in the fourth quarter of 2025, according to new projections from Robert A. Stanger & Company, Inc.
Stanger estimates the total $1 trillion milestone will break down across categories as follows: Real estate ($348.1 billion), closed-end funds ($307.5 billion), BDCs ($235.0 billion), other strategies ($113.6 billion).
“Crossing the trillion-dollar threshold is more than a number—it is a defining moment for alternatives,” said Kevin T. Gannon, Chairman and CEO of Stanger. “What was once a niche segment of the market is now a central component of investor portfolios. Real estate remains a cornerstone, but closed-end funds and BDCs are surging, reflecting strong demand for private credit and private equity strategies.”
The industry’s expansion has been fueled by investors’ pursuit of yield, diversification, and private market access, with institutional-quality products increasingly available to individuals through more accessible structures. Enhancements such as regular NAV reporting, improved liquidity, and broadened access to top-tier managers have further accelerated inflows.
“Investors are voting with their capital, and the message is clear: alternatives are here to stay. As structures evolve and access broadens, we see this market not just maintaining momentum but accelerating into its next phase of growth.” said Michael S. Covello, executive managing director of Stanger.
Stanger noted that fundraising has surged in the past five years, with BDCs and closed-end funds capturing the fastest growth rates. Looking ahead, Gannon underscored that the trillion-dollar milestone is just the beginning: “I expect the next $1 trillion will be raised in alternative investment products over the next five years.”
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