The Trump administration is preparing an executive order that could mark a significant regulatory shift by making private markets investments available to the $12.4tn US 401(k) defined-contribution retirement market, according to a report by Reuters.
The report cites unnamed people familiar with the discussions as revealing that the expected order would direct the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to issue new guidance for employers and retirement plan administrators on incorporating private-market investments – including private equity, credit, and real assets – into 401(k) plans.
Although final details are still under review, the move is viewed as a potential tailwind for large private equity managers such as Blackstone, Apollo Global Management, Blue Owl Capital, and others, who have been lobbying for broader access to retail retirement accounts. With traditional institutional investors nearing their allocation limits in private markets, defined-contribution plans represent an untapped growth opportunity.
Plan sponsors are currently allowed to include private-market investments in limited circumstances, often through vehicles like target-date funds, but most remain hesitant due to litigation risk and concerns over fees and complexity.
Firms are already developing new products aimed at this space: Apollo and State Street have launched a target-date fund with private markets exposure, while Blue Owl is partnering with Voya to build similar offerings.
The new order would build on a 2020 Labor Department letter issued during Trump’s first term, which said that private equity investments could be responsibly included in defined-contribution plans. That guidance was effectively softened under the Biden administration in 2021, which stated it did not recommend or endorse such allocations.
