The average Total Fee Burden for core open non-listed REITs declined slightly from 25.4% to 25.2% as of September 2017, as non-listed REITs continue fee reductions.
Credit funds increased their capital raise to $323 million for the six month financial periods ending 6/30/17. FS Global Credit Opportunities Funds dominate fundraising, but several new credit funds have recently entered the market.
Non-listed REIT cap rates continued eight years of compression with a decline to 6.1% for 2Q17 YTD. Cap rate spreads dropped to a low 2.2% for 2Q17 YTD, which reduces leveraged yields.
Non-listed REIT fundraising declined to $1.0 billion in 2Q17, which is the lowest quarterly total in nearly 13 years. Non-listed REIT fundraising is hopefully nearing a bottom.
In 2Q17, Blackstone Real Estate Income Trust raised $412 million, which was 40% of non-listed REIT fundraising. The market now knows what happens when a big fish enters a small pond.
Perpetual life non-listed REITs posted 1.50% returns in 2Q17 with 1.01% in distributions and 0.49% in appreciation. TTM return is 5.95% and three-year average annual returns are 6.77%.
Non-listed BDC posted 1.5% NAV declines in 2Q17 and total returns for 2Q17 YTD is 2.5%, which is an annualized pace that is significantly below the 16.5% returns in 2016.
Non-listed BDC fundraising declined to only $263 million in 2Q17, which continues a steady decline. FS Investments III and FS Investments IV were the top two fundraisers in 2Q17.
Non-listed BDCs posted -0.06% returns in 2Q17, which ended four quarters of positive returns. TTM returns as of 2Q17 are 9.40% and three-year average annual returns are only 4.15%.
CION Ares Diversified Credit Fund filed its first financial report: Semi-Annual Report as of 4/30/17, which covers its first five months of operations.