Capital flows to direct investments, such as REITs and business development companies (BDCs), increased by 14 percent for the first quarter of this year from the same time last year, according to data released Monday.

According to a study by the Investment Program Association (IPA), a trade association for non-listed direct investment vehicles, and Robert A. Stanger & Company, an investment banking firm specializing in direct investment securities, equity capital flows to direct investments reached $5.6 billion for the first quarter of 2014.

Non-listed REITs attracted approximately 75 percent of direct investment capital, raising over $4.1 billion in the first quarter of 2014, an increase of 5.6 percent over the first quarter of 2013. Currently, 43 public, non-listed REIT offerings are registered to raise a total of $62.6 billion in equity capital.

The sector with the greatest momentum in fund-raising growth is non-listed BDCs. First quarter investment in BDCs topped $1.4 billion, a 53 percent increase above the $938 million raised in the first quarter of 2013. At current investment rates, fund-raising by BDCs will have nearly quadrupled since 2011. Currently, 10 non-listed BDC offerings are registered to raise more than $14 billion.

“Three primary factors continue to underpin the success of the direct investment industry among retail investors and their advisors,” says Kevin Gannon, managing director of Stanger. “We believe this relatively young industry will see substantially higher levels of investment in coming years because these factors will prevail for the foreseeable future.”

First, liquidations and listings of non-listed REITs formed in prior years have produced attractive total returns to investors. Second, in the current low-rate environment, investors are attracted to the yield advantage of real estate and corporate development loans over more traditional fixed-income investment alternatives. These yields are typically 6 percent or more. Third, continued macroeconomic uncertainties and their potential impact on the stock market make portfolio diversification attractive to investors, according to the IPA and Stanger.

“With their higher-than-average current income and low correlation to stocks, bonds and other financial instruments, direct investments remain attractive in the current low-rate environment,” says Kevin M. Hogan, IPA president and CEO.