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Private equity wants a larger piece of workplace retirement plan assets

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1 year ago

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Lordhenrivoton | E+ | Getty Images

The first Trump administration opened the door to allow private equity into workplace retirement plans. Now, private equity firms are working to play a bigger role in workers’ portfolios, which experts say has potential risks and rewards for investors. 

“It’s a train that’s already been gearing up, and folks are starting to hop on,” said Jonathan Epstein, president of Defined Contribution Alternatives Association, an industry group that advocates for incorporating non-traditional investments into employer-sponsored retirement plans. 

Private equity is part of a broad category of alternative investments can include real estate funds, credit and equity in private, not publicly-traded, firms. Pension funds, insurance companies, sovereign wealth funds and high-net-worth individuals are traditional investors in these private markets.

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The argument from the private equity industry for incorporating such investments in workplace retirement plans is that these investments could give retail investors more diversification away from public markets and a shot at bigger returns. But such investments also raise concerns about liquidity and risk, experts say.

“It’s typically not easy to cash out the assets in a hurry,” said Olivia Mitchell, a professor of business economics and public policy at the University of Pennsylvania, and executive director of the Pension Research Council. “This could be a big challenge for 401(k) plan participants who either simply want to access their money or want to readjust their portfolios as they near and enter retirement.”

Private equity is less than 1% of retirement assets

Defined contribution plans include employer-sponsored retirement savings accounts such as 401(k) plans and 403(b) plans. There are an estimated $12.5 trillion in assets held in these accounts, as of the end of the third quarter in 2024, according to Investment Company Institute.

Private equity makes up less than 1% of those assets. A small number of large employer-sponsored retirement plans offer private equity investments as an alternative investment option within target-date funds or model portfolio funds.

Now, private equity firms like Apollo Global Management, Blackstone and KKR are trying to make inroads into defined contribution plans through new products. Apollo has told its investors that it sees significant opportunities for private equity in retirement and the firm is just getting started.

When private investments are added to retirement solutions, “the results are not just a little bit better, they’re 50% to 100% better,” Marc Rowan, a co-founder and CEO of Apollo, said on the private equity firm’s Feb. 4 earnings call. “Plan sponsors understand this.”

Apollo CEO on retirement investment opportunities

MissionSquare Investments offers private equity investments in retirement plans that it manages for public service employees.

“What we find is there’s an outflow in the public stock and bond [markets] and there’s an inflow into the private markets, but participants can’t get access to private markets,” said Douglas Cote, senior vice president and chief investment officer for MissionSquare Investments and MissionSquare Retirement.

The number of companies backed by private equity firms has grown significantly over the last 20 years as the number of publicly traded companies has declined. About 87% of companies in the U.S. with annual revenues of more than $100 million are now private, with 13% publicly traded, according to the Partners Group, a Swiss-based global private equity firm. 

‘Some plan sponsors are very much against this’

I’ve got all the paperwork here

Delmaine Donson | E+ | Getty Images

The law covering 401(k) plans requires plan sponsors to act as fiduciaries, or in investors’ best interest, by considering the risk of loss and potential gains of investments.

During President Donald Trump’s first term, the Labor Department issued an information letter to plan fiduciaries, telling them that private equity may be part of a “prudent investment mix” in a professionally managed asset allocation fund in a 401(k) plan. The Biden administration took a more cautious approach, warning that these investments aren’t “generally appropriate for a typical 401(k) plan.”

“Some plan sponsors are very much against this initiative to make direct investments to private equity available through the defined contribution plan,” said Bridget Bearden, research and development strategist at the Employee Benefit Research Institute. “They think that it’s pretty illiquid and very risky, and don’t really see the return for it.”

There are four main factors that have plan sponsors taking a conservative approach to private equity. 

1. Complexity and lack of transparency 

Unlike publicly-traded assets, basic information on private equity investments — like what firms are in a fund and what their revenues and losses are — can be challenging to obtain.

“It’s even hard for institutional investors, pension funds, endowments, depending on their capital contribution, it’s hard for them to even get information about some of the books and records,” said Chris Noble, policy director at the Private Equity Stakeholder Project, a nonprofit watchdog organization. “If you want to take advantage of retirement money, you should be subject to the same regulations that public companies are.”

2. Liquidity and valuation 

Private equity investments require longer-term capital commitments, so investors can’t cash out at any time, experts say. Redemptions are limited to certain times. There aren’t open markets to determine the valuation of a fund, either.

3. High fees

Fund managers also have to justify the higher and more complex fees associated with private equity. Exchange-traded and mutual funds collect management fees, while private equity firms can collect both management and performance fees. 

The average ETF carries a 0.51% annual management fee, about half the 1.01% fee of the average mutual fund, according to Morningstar data. Private equity firms typically collect a 2% management fee, plus 20% of the profit.

4. Threat of lawsuits 

Employers have shied away from private equity investments, in part because of fear they could be sued.

“They are concerned about the risk of exposing their employees to downfalls,” said attorney Jerry Schlichter of Schlichter, Bogard & Denton, who pioneered lawsuits on behalf of employees over excessive fees in 401(k) plans. “They’re also concerned about their own inability to fully understand the underlying investments, which they’re required to do as fiduciaries for their employees and retirees.”

But private equity supporters are starting to make an opposing argument, suggesting that plan sponsors who don’t include private assets are harming their participants with greater concentration of public assets and lower returns.

“Lawsuits could go after plan sponsors for not including alternative investments based on their performance track record,” said Epstein of DCALTA. “Even net of fees and net of benchmark returns, private markets have done extremely well over long periods of time.” 

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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