President Donald Trump is expected to sign an executive order within days directing the Labor Department and the SEC to craft guidance that lets 401(k) plan sponsors add private market assets—private equity, venture capital, real estate and hedge funds—to their investment menus, as reported by The Wall Street Journal.
The move resurrects a 2020 Labor Department information letter that first opened the door to alternatives in target date funds but was later toned down by the Biden administration.
Industry trade groups applaud the policy shift. Bryan Corbett, CEO of the Managed Funds Association, called it a step that “will provide more Americans with the diversification and investment options needed to build wealth and save for successful retirement.” 
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Alternative asset managers have lobbied hard for access to America’s $8.7 trillion defined-contribution pool. Blue Owl Capital teamed up with Voya Financial this week to build private market options for Voya’s plans, while BlackRock plans to seed a 2026 target date fund with a 5%–20% private asset sleeve via Great Gray Trust.
For proponents, the rationale is simple: public equity supply keeps shrinking: fewer than 4,100 companies now list on US exchanges versus more than 8,000 in the late-1990s. Meanwhile, the top ten stocks command over a third of total market value. Private markets, they argue, offer access to earlier stage growth and uncorrelated credit in exchange for illiquidity.
Yet legal specialists warn that the complexity, opacity, and fee load of private funds raise fresh fiduciary risks. ERISA lawyer Fred Reish notes that plan committees and even individual officers can be “personally liable” if they lack the skill to vet such vehicles prudently. That burden could limit uptake to large employers with in-house expertise, leaving smaller plans on the sidelines for now.
The 2020 DOL letter itself cautioned that higher costs, intricate valuations, and long lock-ups demand “care, skill, prudence, and diligence” from fiduciaries.
The executive order’s specifics are still being hashed out, according to the Journal’s report.
Information for this story was found via The Wall Street Journal, CNBC, PE Insights, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
