The typical retirement saver in the United States does not have access to alternative investments and private markets within their 401(k) plan or individual retirement account. That could soon change, according to a panel of experts convened on the second day of the 2025 National Association of Plan Advisors conference in Las Vegas.
Speakers on the panel included Jennifer Doss, senior director and defined contribution practice leader at Captrust; Steve Humenik, global head of capital markets legal at Crypto.com; Michelle Rappa, managing director and advisor at Neuberger Berman; Steve Ulian, managing director and defined contribution specialist at Apollo Global Management; and Sara Shean, executive director and U.S. DC practice leader at PGIM Real Estate.
They all brought various points of view to the discussion, but their overall viewpoints on the ongoing “democratization” of alternative assets were in strong alignment. As was their conviction that this trend — assuming advisors, asset managers and retirement plan providers do their part — will significantly benefit the average retirement saver.
“Why is this happening now and why do we think it’s a good thing for the end investor?” Humenik asked. “In one word, it’s about ‘outcomes.’ We’ve known for a long time that exposure to alternatives has benefited people in pension plans and high-net-worth investors who access them in the retail marketplace. But until very recently, we haven’t had the infrastructure to make it work in 401(k)s.”
Ulian and the other panelists agreed with that take, noting that significant work has been done “behind the scenes” over the last decade to make the broader distribution of all manner of alternative assets a reality.
“This has 100% been a plumbing issue more than a question about the investment thesis for alternatives, and today we’re finally at a point where we can make this work in a seamless way for investors and employers sponsoring 401(k)s,” he said. “It’s very exciting, and if we get it right in terms of pricing, transparency and liquidity, it will improve investor outcomes.”
Solving the Plumbing Problem
The panel pointed to three primary solutions to the longstanding “plumbing problem” that has kept more opaque and illiquid investments across the private equity spectrum from making headway into the highly regulated 401(k) plan space — where both liquidity and transparency are paramount.
Regarding private markets in general, Ulian explained, the development of so-called “semi-liquid evergreen fund structures” has been a game changer.
“In the past, you only really bought private credit via a drawdown fund,” he recounted. “You would give Apollo or another firm your money for seven to 10 years, and you were not going to get much of it back before then. That’s just not a great fit for retail wealth management outside of accredited investors and really not even possible in the 401(k) plan context.”
Fast forward to the last few years, Ulian said, and the private markets industry has created semi-liquid evergreen structures that solve the four key problems associated with private markets in the context of a regulated marketplace like 401(k) plans: tax complexity, illiquidity, high minimums and return exposure delays.
“To be clear, these funds aren’t appropriate to put directly into the hands of untrained retirement savers, but what you can do today is put the semi-liquid evergreens inside a fund-of-funds or an advisor-managed account,” Ulian said. “From my point of view, this is a really big development and one I expect will catch on in the years ahead. It’s about providing diversification and alpha for investors.”
When it comes to distributing private real estate, Shean said, the target-date fund vehicle is leading the way.
“Private real estate is now in seven popular off-the-shelf TDFs today,” she noted. “You can do this via custom TDFs as well, but it doesn’t need to be custom. I think we’ll see more and more of this. … The industry can work together to get professionally managed solutions into the hands of participants.”
It’s a similar story for crypto assets, Humenik said.
“I would say the two biggest developments for cryptocurrencies in this context are the launch of spot ETFs and the creation of institutional quality custody platforms,” he said. “These have taken crypto from a retail-only consideration to one that is more and more relevant for institutional investors, including retirement plans but also many other types of institutions that have been hesitant on crypto.”
The Opportunity Set Is Vast
When it comes to communicating with clients about these issues, the panel agreed, the term “alternative assets” needs some significant unpacking. To novice investors (and even to relatively experienced ones), the term lumps together what is really a diverse and vast opportunity set.
“For example, when people hear ‘private real estate,’ they often think about homeownership,” Shean said. “That’s, of course, not what we’re talking about today. Instead, it’s about accessing the growth potential and diversification benefits of commercial real estate. Industrial, retail, apartments and offices are the most compelling opportunities right now — especially apartments and industrial.”
On the private equity and private credit side, Ulian said, the opportunity set is so much bigger than it was 30 or 40 years ago.
“Apollo was founded as a traditional private equity firm,” he recalled. “We would buy, invest in, fix up and then sell a company — often using a lot of leverage — and that generally came along with a lot of risk. Today that has totally changed, but there is still a misconception that all private market investments are high-risk, high-flying hedge funds. Today, there’s a much broader array of options and risk profiles.”
For crypto, Humenik said, there's obviously bitcoin to consider, but there are also alternative coins, memecoins, non-fungible tokens and other ways of potentially investing in and through blockchain technology.
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