New capital commitments into a widely used segment of private credit funds geared toward wealthy investors fell sharply in the first quarter of this year, RA Stanger said on Wednesday. The specialist investment bank reported that new-money flows were down 45% compared with the same three-month stretch in 2025.
Stanger attributed part of the pullback to growing unease around artificial intelligence and its potential to disrupt software companies. That concern has reverberated through private credit and private equity firms that either lent to or acquired software businesses during an extended era of low interest rates, the firm said.
Alongside those technology-related worries, questions have emerged about lending standards and about how some private-market assets are being valued. These doubts, Stanger's data indicate, have coincided with a notable reduction in sales of non-traded business development companies, or BDCs.
Sales of non-traded BDCs - vehicles that pair equity with leverage to lend to private companies - totaled $8.9 billion in the first three months of this year, down from $16.3 billion in the same period last year, the data showed.
"The capital rotation out of private credit is no longer emerging - it’s firmly underway," Kevin Gannon, chairman and CEO of Stanger, said in a statement. Stanger tracks so-called alternative assets, which include private equity and private credit.
At the same time as allocations to private credit slowed, investors shifted some money toward strategies that focus on tangible assets perceived as less susceptible to rapid obsolescence driven by technology advances. Stanger's figures show that real estate funds attracted 26% more new money than in the year-ago quarter, while infrastructure funds registered a 14% increase in new capital.
Stanger's coverage includes 23 publicly registered BDCs and 106 privately offered BDCs, the latter of which generally require higher minimum wealth thresholds to invest. The bank's tally does not include BDCs that are listed and traded on public exchanges.
Alternative asset managers have increasingly turned to affluent individuals as a source of fundraising in recent years, according to the data. The report also notes that U.S. President Donald Trump has sought to encourage the inclusion of less liquid assets within American retirement plans.
Summary
RA Stanger reported a 45% drop in new-money flows into private credit funds for wealthy investors in Q1 versus the same period in 2025. Non-traded BDC sales fell to $8.9 billion from $16.3 billion, while real estate and infrastructure strategies saw inflows increase by 26% and 14%, respectively. Concerns about AI-driven disruption, lending standards and valuation transparency were highlighted as contributing factors.