Retirement plan sponsors are taking a cautious approach to incorporating private assets, according to a recent report

Private Assets in Retirement Plans: A Slow and Cautious Shift

Although many individuals saving for retirement are interested in adding private assets to their workplace retirement plans, employers and plan sponsors are proceeding with caution.

Research from Cerulli Associates reveals that only a handful of retirement plans are introducing private asset options this year. It is expected to take nearly ten years before even one-fifth of defined-contribution plans offer target-date funds or managed accounts that include private market investments.

Private investments are often promoted for their potential to deliver higher long-term returns and greater diversification. However, the current enthusiasm for these assets far exceeds the pace at which they are being integrated into mainstream retirement offerings, such as private equity, venture capital, hedge funds, and real estate.

Subscribe to the Mind Your Money Weekly Newsletter

By signing up, you agree to Yahoo's Terms and Privacy Policy.

“It’s not that sponsors are intentionally delaying, but interest doesn’t translate to immediate implementation,” explained Chris Bailey, a director at Cerulli, in an interview with Yahoo Finance. “Many sponsors are wary of fees and potential legal risks associated with adding these options, which slows down the adoption process.”

The Cerulli report found that over 80% of plan sponsors view cost as a major obstacle to including private market assets in retirement plans. Other significant concerns include liquidity and valuation challenges.

A Gradual Transition

Momentum to allow millions of retirement savers access to private assets gained attention last summer after President Trump directed the Department of Labor and the SEC to create guidelines for defined-contribution plans to include these investments, which are already permitted in retirement accounts.

Further reading: Retirement planning: A step-by-step guide

Goldman Sachs (GS) recently acquired a $1 billion stake in T. Rowe Price (TROW) with plans to launch co-branded target-date funds by mid-2026. These funds will combine private assets with traditional stocks and bonds for US retirees.

BlackRock (BLK) has also introduced a target-date fund featuring private credit, private equity, and other alternatives. Empower, the second-largest retirement services provider in the country, is preparing to offer private equity, credit, and real estate options in select portfolios, following similar moves by Voya Financial and Blue Owl Capital.

Blackstone (BX), a leader in real estate and private equity, has partnered with Vanguard and Wellington Management to develop “multi-asset investment solutions” that expose individual investors to both private and public markets.

Shifting Attitudes, Slow Adoption

Half of the plan sponsors surveyed by Cerulli indicated that the presidential directive made them more likely to consider investment options that include private market assets.

However, consideration does not mean immediate action. “The process will be slow, especially in the early years,” Bailey noted. “That’s just how plan sponsors operate, particularly with new products.”

Limited Demand Among Plan Sponsors

According to Cerulli’s findings, about 40% of plan sponsors are eager to learn more about the advantages and drawbacks of target-date and managed account options that include private market assets. This curiosity is most pronounced among larger plans with assets between $250 million and $1 billion.

On the investor side, enthusiasm is growing. Nearly half of 401(k) and similar plan participants say they would invest in private equity and private debt if given the chance, according to Schroders' 2025 US Retirement Survey. Over 75% would even increase their contributions to take full advantage of these opportunities.

Learn more: How does a 401(k) work?

Despite this interest from savers, many plan sponsors remain hesitant. Researchers note that “there is no widespread demand for these options” among sponsors.

“Most plan sponsors are not actively seeking private market assets; it’s rare for them to request asset managers to create new investment options focused on private markets for their defined-contribution plans,” Cerulli researchers observed.

Education and Fiduciary Responsibility

Bailey emphasized that sponsors need to better understand these products, including their intended purpose and the types of participants who would benefit most.

“There’s also an educational gap, especially around liquidity. For instance, can participants access their money when needed? And how are private assets valued, since private equity isn’t priced daily?” he added.

Another critical factor is ensuring that investment options comply with fiduciary standards, which require acting solely in the best interests of plan participants and their beneficiaries.

While private assets are not expected to become widely available overnight, they are likely to be included in professionally managed options over time, such as target-date funds, managed accounts, and multi-asset portfolios that combine fixed income with private credit and real estate.

Importantly, this shift does not mean individual 401(k) savers will directly invest in private assets. Instead, asset managers will determine the allocation to private markets within the investment options, not the participants themselves.

“Plan sponsors take their duties seriously,” Bailey said. “They’re open to learning about these investments and considering them for their potential to boost returns and reduce volatility, but they’re not rushing to implement them.”

Kerry Hannon is a Senior Columnist at Yahoo Finance, specializing in career and retirement topics. She is the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future", "In Control at 50+: How to Succeed in the New World of Work", and "Never Too Old to Get Rich."

Subscribe to the Mind Your Money newsletter

Find the latest personal finance news, including tips on investing, debt repayment, home buying, retirement, and more

Stay updated with the latest financial and business headlines from Yahoo Finance