Nonlisted real estate investment trusts and business development corporations had a banner first half this year, with a record $10.7 billion invested, the highest half-year total on record.

Those capital inflows to nonlisted REITs and BDCs represented a 65 percent increase compared with the first six months of 2012, says The Investment Program Association (IPA), a trade association for companies offering direct investments, those not listed on a public exchange.

The total inflows for the first six months of 2013 almost matched investments for the entire year in 2012, according to data compiled by Robert A. Stanger & Company, a Shrewsbury, N.J.-based independent investment banking firm that specializes in direct investment securities.

Continued investor uncertainty about government fiscal, monetary and tax policy and the concerns about long-term inflation are prompting investors’ interest in the category, which is backed by hard assets, according to Stanger.

Low-interest rates on Treasurys and other fixed-income securities as well as fear of equities despite their rebound have also increased interest in direct investments, Stanger says.

Direct investments are particulary appealing to investors looking for income. Nonlisted REITs provide more income than most fixed-income alternatives and usually offer higher dividends than their publicly traded counterparts. However, transaction costs are usually higher and the investments are more difficult to sell since they aren't on traditional exchanges. BDCs are other direct investments that offer high yields. They are closed-end investment management companies that invest in businesses through various equity investments and debt securities--predominantly the latter, which can range from senior secured loans to non-investment-grade vehicles.

“Investors in today’s yield-starved environment are eager for sources of above-average income and for the portfolio diversification provided by investments in hard assets and smaller companies. These external concerns will continue to underpin investment in the second half of 2013.” says Kevin Hogan, the IPA's president and CEO.