Non-Listed BDCs Hit Turning Point After Years of “Open-Road” Growth
After several years marked by rapid fundraising, expanding net asset values, and double-digit total return expectations, the non-listed BDC market is entering a period of recalibration, according to new data from Robert A. Stanger & Company.
Aggregate NAV for non-listed BDCs rose 2.9% in the fourth quarter to $131.8 billion—a notable downshift from the 9.0% quarter-over-quarter growth recorded in Q3. The Stanger Non-Listed BDC Index gained 1.8% in Q4, tying its lowest quarterly performance in nearly three years and falling below its 2.6% trailing ten-quarter average, signaling moderating total return momentum.
Fundraising remains strong on a full-year basis but is also showing signs of cooling. Publicly registered and private placement BDCs raised more than $63 billion in 2025, up 13.9% year over year, with publicly registered vehicles accounting for $43 billion, a 22.6% increase. However, Q4 cumulative fundraising declined 10.1%, and December sales totaled $4.8 billion—down 22.6% from the March peak. December fundraising for publicly registered BDCs alone fell nearly 50% from April highs.
“The warning lights have been flickering for some time,” said Michael Covello, executive managing director at Stanger. “We first saw isolated fraud cases, then distribution rates began trending lower, followed by compression in total returns. Most recently in private credit, investor sensitivity around AI-related exposure and software-heavy portfolios has added another layer of caution.”
Redemptions accelerated sharply in Q4 as investors became more selective. Redemption rates rose to 4.71% of beginning-of-quarter NAV, up from 1.62% in Q3, with multiple BDCs exceeding their quarterly caps to meet demand. Blue Owl Technology Income Corp. raised its tender cap from 5% to 19%, ultimately repurchasing approximately 15.4% of NAV. Among BDCs with more than $1 billion in aggregate NAV, redemptions increased 217% quarter over quarter.
“The prolonged period of open-road growth for non-listed BDCs is giving way to a hairpin turn,” said Kevin Gannon, chairman and CEO of Stanger. “While 2025 marked another record year for capital formation, Q4 data shows slowing inflows, moderating total returns, and rising redemption levels.”
As investors reassess risk, Gannon added, capital is beginning to rotate toward more defensive, income-durable segments, including NNN real estate structures and mortgage REITs.
