Real Estate, Infrastructure Pull Ahead as BDC Fundraising Slows
Alternative investment fundraising totaled about $13.4 billion in February, an 8% decline from January, as flows began to tilt away from credit-heavy vehicles and toward real assets.
Interval funds narrowly edged out business development companies (BDCs) for the month, raising $2.90 billion versus $2.87 billion, while tender-offer funds followed at $2.1 billion, according to the latest edition of The Stanger Market Pulse from Robert A. Stanger & Co.
The BDC slowdown that emerged late last year has extended into 2026. February BDC sales were down nearly 43% versus February 2025 and just under 54% below the all-time monthly high of$ 6.2 billion raised in March 2025.
“Investor allocations across alternatives are beginning to realign toward HALO strategies — hard assets with low obsolescence — as market conditions evolve,” said Kevin T. Gannon, chairman and CEO of Stanger.
He noted that while February fundraising for BDCs declined 43% year over year and broader credit strategies fell 30%, “real estate strategies, including REITs, DSTs and closed-end funds increased 31%, with infrastructure deals also posting year-over-year growth.” Coupled with rising BDC redemptions, Gannon said, this pattern is “consistent with the early stages of a broader cycle transition.”
Fundraising in non-traded REITs and DSTs reached $612 million for publicly registered non-traded REITs, $564 million for private-placement REITs, and $741 million for DSTs in February; a combined 31% year-over-year increase.
Redemption pressure is also flashing. “Earlier this month, we saw the BDC redemption pressure come to a head with HPS becoming the first publicly registered BDC to prorate Q1 redemption requests,” Gannon said. After receiving requests equal to 9.3% of shares outstanding, HPS honored only the standard 5% quarterly cap. That followed Blackstone’s move to redeem 7.9% of shares outstanding after a $400 million investment from the firm and its employees allowed it to fulfill 100% of Q1 requests.
Below are the top 20 sponsors for year-to-date gross fundraising, per Stanger.
*Source: Robert A. Stanger & Company, Inc. and Mountain Dell Consulting
