Blackstone President Jon Gray expects the largest alternative asset managers to lead the charge once US 401(k) plans are allowed to include private markets, crypto, and other alternatives alongside traditional stocks and bonds, according to a report by Bloomberg.
The White House is reportedly preparing an executive order to provide legal clarity for 401(k) plan managers, enabling them to offer these new asset classes.
Gray told analysts on Blackstone’s Q2 earnings call that such policy changes could transform target-date funds – pre-mixed portfolios that represent millions of Americans’ retirement savings. He said firms with large “perpetual” capital pools, strong brand names, and proven legal frameworks will have the advantage.
The move could further concentrate the industry around a handful of dominant players, widening the gap between large firms and middle-market managers, many of whom have struggled amid a slow deal environment.
While proponents argue that private assets could boost returns, critics caution about higher fees, increased risk, and lower liquidity compared to traditional investments.
Currently, the $12tn in US defined-contribution plans remains largely off-limits to private equity due to legal concerns over fiduciary risk.
Blackstone highlighted its scale in private wealth during the call, noting a 30% rise in Q2 sales to $10bn, driven largely by its flagship credit fund for individual investors.
