As private equity firms eye 401(k) plans, industry lobbying efforts are expected to intensify under the Trump administration. This push raises complex ERISA issues that fiduciaries must navigate, Carol Buckmann explained in her conversation with InvestmentNews editor Emile Hallez.
Key takeaways from the article include:
Private equity (PE) investments are difficult to value compared to publicly traded securities, which can complicate their inclusion in retirement plans.
PE investments are less liquid, making them harder to access or sell quickly — a significant drawback for 401(k) participants who may need flexibility.
These investments often come with substantial fees, which can erode returns and raise concerns for plan sponsors and participants.
“It does require a lot of expertise to evaluate these investments, and I don’t think your average plan participant is really in a position to do that,” Buckmann said to InvestmentNews, adding that there may be a place for private equity in professionally managed funds. Learn more below.