Retirement savers show eagerness to invest in private assets through their employer plans, but plan sponsors are approaching the matter with caution. A recent report from consulting firm Cerulli Associates indicates only a small number of plans are introducing such offerings this year. It may take about a decade for even 20% of defined-contribution plans to include a target-date product or managed account that allocates to private market assets.
Private investments are promoted for potentially higher returns and diversification over time. However, the current enthusiasm appears disproportionate to the realistic timeline for these investments—including private equity, venture capital, hedge funds, and real estate—to become mainstream.
"I wouldn’t say they are deliberately slow-walking it, but interest does not equal immediate adoption," Chris Bailey, a Cerulli director, told Yahoo Finance. "Sponsors tell us they have concerns about fees and potentially being sued over adding these options to their plan menus. It makes for a slow adoption process."
More than 80% of plan sponsors reported that cost was a significant concern when considering incorporating private market assets into employee plans. The report also cited liquidity and valuations as other major concerns.
Last summer, an executive order from President Trump instructed the Department of Labor and the Securities and Exchange Commission to draft guidance for defined-contribution plans to incorporate these types of investments, which are already permitted. This move brought attention to the push for allowing retirement savers in employer plans to access private assets.
In response, several financial firms have announced initiatives. Goldman Sachs acquired a $1 billion stake in global asset manager T. Rowe Price, aiming to offer private assets to U.S. retirees by mid-2026 through co-branded target-date funds. BlackRock previously announced a target-date fund including private credit and private equity. Empower, Voya Financial, and Blue Owl Capital have also revealed plans to include private equity, credit, and real estate in some retirement portfolios. Blackstone announced a partnership with Vanguard and Wellington Management to develop multi-asset investment solutions for individual investors.
Half of the sponsors surveyed by Cerulli said the president’s order increased the likelihood they would consider an investment option allocating to private market assets. The key word is "consider." "It’s going to be a really slow process, especially in the first couple of years," Bailey said. "It's the nature of how plan sponsors operate, especially with a new product."
About 40% of plan sponsors are very interested in learning more about the pros and cons of target-date and managed account options that allocate to private market assets, according to Cerulli’s research. Much of this interest comes from large plans with $250 million to $1 billion in assets.
Investors, however, are showing more enthusiasm. Nearly half of investors in 401(k) and similar plans say they would invest in private equity and private debt if offered, according to Schroders' 2025 US Retirement Survey. More than 75% say they would increase their paycheck contributions to take full advantage.
Despite savers' interest, many plan sponsors are not demanding these options. "There is no demand for these options" is a common refrain in the industry, researchers noted. "A groundswell of plan sponsors are not clamoring for private market assets; it is difficult to imagine the average plan sponsor specifically asking asset managers to develop a new investment option that allocates to private market assets for their DC plan," per the Cerulli researchers.
Bailey said sponsors need to learn more about these products, including their intended purpose and suitability. "There's also a degree of education that needs to happen because plan sponsors haven't really had to wrestle liquidity. For example, are my participants going to be able to get the money out when they want it? And you've got questions about valuation — private equity isn't valued on a daily basis," he added.
Providing investment options that meet fiduciary requirements, such as acting solely in the interest of participants, remains a key challenge. Researchers say these assets will eventually be embedded in professionally managed options like target-date products, managed accounts, and multi-asset investments, but not imminently.
The rollout will not mean the average 401(k) saver invests directly in private market assets. The plan sponsor’s asset manager will determine the allocation to private assets, not the participant, according to Bailey. "Plan sponsors do take the responsibility seriously," he said. "They’re interested in learning more about them and considering them because they can provide higher returns and less volatility, but they aren’t going to take immediate action."