Alternative Market Briefing

The Opening of 401(k)s to Private Assets: What it really means for alternatives

Thursday, August 28, 2025

Matthias Knab, Opalesque for New Managers:

Key developments, scale of opportunity, and who stands to win as US DC plans inch toward private markets.

UBP's Private Markets Advisory Team has released the latest edition of UBP's 'Headlines' commentary which discusses the 'Opening of 401(k)s to Private Assets'. Here's a summary with UBP's recommendation what to watch out for next:

In early August, an executive order asked the US Department of Labor and the SEC to lay out, within 180 days, how private equity, private credit, real assets, infrastructure, and even digital assets could be incorporated into defined-contribution plans like 401(k)s, and to craft fiduciary safe harbors for plan sponsors.

Why this matters

DC plans span 90+ million participants and roughly USD 12 trillion in assets, with about USD 9 trillion in 401(k)s alone.
Target-date funds (TDFs) hold around 40% of 401(k) assets and are the default in many plans, making them the most likely initial conduit for modest illiquid sleeves.

The fine print

Fees: TDF expense ratios have roughly halved over the past decade (about 58 bps in 2014 to ca. 30 bps in 2023). Adding alternatives risks pushing costs higher, a commercial hurdle for sponsors and record keepers.
Liquidity: DC participants can move mone......................
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