The pressure that had been quietly building in the non-listed BDC market since late 2025 broke into the open in the first quarter of 2026, as fundraising collapsed and redemptions surpassed new capital for the first time on record.
According to investment banking and research firm Robert A. Stanger & Company, Q1 gross sales totaled $4.9 billion, down 46% from Q4 2025 and 59% from the same period a year ago. More consequentially, NAV BDC sponsors met approximately $6.9 billion in redemption requests during the quarter, marking the first time quarterly outflows have exceeded quarterly inflows in the sector’s history.
Despite the pressure, performance held up relative to public market peers. The Stanger NL BDC Total Return Index posted a nearly flat -0.03% in Q1, its first negative quarterly return since Q2 2022, but a striking contrast to the S&P BDC Total Return Index, which fell 10.1% in the quarter and 14.0% over the trailing twelve months. The Stanger Index, by comparison, returned 6.2% over the same period.
Redemption management varied across sponsors. Five NAV BDCs fulfilled requests up to their quarterly caps and prorated the remainder. Notably, Blackstone Private Credit Fund and Oaktree Strategic Credit Fund exceeded the standard 5% quarterly repurchase limit to satisfy 100% of investor requests. More recently, Golub Capital Private Credit Fund reported Q2 redemption requests of 8.5% of shares outstanding, signaling that pressure has not yet abated.
“Fundraising has slowed, redemptions have risen, and for the first time, more capital left non-listed BDCs in a quarter than came in,” said Kevin T. Gannon, Chairman and CEO of Stanger. “But the structures are functioning as designed: sponsors delivered a record level of liquidity in Q1, and no NAV BDC has gated redemptions.”
“As we saw with NAV REITs in 2022, these vehicles were built to manage periods of elevated redemptions, and Q1 showed that the structure can absorb meaningful liquidity pressure,” Gannon added.
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