Private equity managers could gain unprecedented access to US retirement savings after President Donald Trump signed an executive order on Thursday designed to expand the range of alternative assets eligible for inclusion in 401(k) plans, according to a report by Reuters.
The order directs the Department of Labor and the SEC to ease regulatory constraints and reduce litigation risk for plan sponsors that offer alternative investment options in defined contribution schemes. While it stops short of adding new investor protections, it seeks to clarify rules that have historically deterred retirement plan fiduciaries from allocating to illiquid, higher-fee asset classes including private equity, private credit, real estate, and digital assets.
For the private equity industry, the move potentially unlocks a share of the $12tn US defined contribution market, long dominated by public equities and fixed income. Firms including Blackstone, KKR, and Apollo – many of which already partner with retirement plan managers – stand to benefit if adoption grows. BlackRock, which lobbied for the change, has announced plans to launch a retirement fund in 2026 incorporating private equity and private credit allocations.
The order comes after several years of elevated interest rates, which have pressured buyout returns and heightened the industry’s appetite for new, stable capital sources. Proponents argue that younger savers in target-date structures could benefit from the higher long-term return potential of private market assets, while detractors warn of added fees, illiquidity, and lower transparency.
Litigation remains a key hurdle. Private equity executives note that uptake is unlikely to be immediate, with plaintiffs’ lawyers expected to challenge the suitability of complex alternative strategies for retail retirement savers. Industry leaders, including BlackRock CEO Larry Fink, have called for data, analytics, and potential litigation reform to accompany broader access.
The Trump administration previously issued guidance in 2020 allowing limited private equity exposure in 401(k) plans, but adoption was minimal amid legal risk. Thursday’s order signals a renewed push to open retirement accounts to the full spectrum of alternative investments — a structural shift that, if successful, could reshape US private equity fundraising.
