The U.S. Department of Labor’s (DOL) recent move to enable private credit, private equity, and other alternative assets within 401(k) retirement savings plans is best viewed as an acceleration of an existing trend, rather than a step change in its own right.
The industry has been moving towards the “democratization” of private markets for several years, driven by demand for diversification, improved yields, and access to differentiated return streams. The DOL’s action has reduced one of the key barriers to broader adoption — fiduciary uncertainty — and in doing so, has brought the defined contribution (DC) market more clearly into scope.
Given the size and stability of the U.S. retirement market, this is significant; however, the implications are less about access and more about execution. For both asset managers and asset owners, the challenge now is how to deliver private market exposure in a way that is operationally robust, scalable, and appropriate for a DC environment.
About the Author
Mike Burns
Senior Partner, Head of NA AWM
Mike leads Alpha’s North American AWM division and possesses a wealth of experience supporting some of the most strategic change initiatives with our most complex clients. He is a trusted advisor to many in the space and has specific expertise on operating model design and technology transformation across the manager value chain.