Non-listed BDC Fundraising Falls 87% as Outflows Reach $4.1B

Publicly registered non-listed business development companies raised $1.5 billion in the third quarter, down 87% from a year earlier and the lowest quarterly total since late 2020, according to Robert A. Stanger & Co., Inc. Redemptions exceeded fundraising for a third straight quarter, producing $4.1 billion in net outflows even as investment returns improved.

Through September, the funds raised $8.6 billion, down 76% from $35.1 billion a year earlier. Sponsors returned more than $18.2 billion to investors over the same period, resulting in $9.7 billion in net outflows, Stanger reported. Aggregate net asset value fell 2.4% from the second quarter to $119.3 billion, while net asset value per share remained largely stable.

Redemption demand eased. Requests fell to 11.5% of net asset value from 12.5% in the second quarter. Sponsors fulfilled 40% of requests, up from 37%, returning about $5.6 billion and leaving an estimated $8.2 billion unmet, down from $9.8 billion the previous quarter.

Six funds fulfilled only a portion of requests, compared with eight in the second quarter. BlackRock Private Credit Fund and Golub Capital Private Credit Fund met all third-quarter requests after prorating them in the prior quarter.

The Stanger NL BDC Total Return Index gained 2.2%, up from 1.2% in the second quarter and matching its strongest quarterly gain since late 2024. All 24 funds in Stanger’s quarterly performance rankings posted positive returns. Over the trailing 12 months, the index gained 5.3%, while the S&P BDC Total Return Index fell 4.4%.

Kevin T. Gannon, Stanger’s chairman and CEO, said stable per-share valuations helped recurring income translate into stronger total returns. “The non-listed BDC market is contracting as investors withdraw capital, not because of broad-based deterioration in NAV per share, and stable valuations have allowed recurring income to translate into improving total returns,” he said.