Schroders has published a fresh cut of data from its annual U.S. Retirement Survey focused on workplace retirement plan investors, finding that 45% of savers say they would invest in private equity and private debt investments if their employer provided access to these assets.
This is up from 36% in 2024, according to the report. At the same time, 77% of savers say they would increase their contributions to their retirement account were access to private assets made available.
Deb Boyden, Schroders’ head of U.S. defined contribution, said in a statement that access to private assets would positively complement savers’ broad use of public investments.
“For decades, traditional pension plan portfolios have mixed public and private investments in the same portfolio to meet their obligations to retirees,” Boyden said. “On the heels of the recent executive order directing the [DOL] to consider improving access to alternative assets for DC retirement plan participants, a wider range of employees may soon be able to combine the benefits of both asset classes to better prepare for retirement.”
Despite significant interest cited by survey participants, only 30% expect private assets to be available in their retirement plan within the next five years. Some 47% say they are unsure about future access, while 23% don’t anticipate their plan menu including private assets before 2030.
Part of the challenge in expanding both access and use, Boyden said, is a widespread lack of familiarity with private assets.
“It’s no secret that most investors are not very knowledgeable about private assets,” she noted. “To date, access to private markets in the U.S. has been restricted to institutions and ultra-high-net-worth investors, so there hasn’t been a reason for most investors to gain a better understanding of the asset class.”
As traditional barriers to entry are removed, Boyden said, the quality and quantity of investor education resources must improve.
To that end, among savers who would invest in private assets through their workplace retirement plan, a gradual approach to allocations is preferred. For example, 51% said they would allocate less than 10% of workplace retirement assets to private assets, while 36% would allocate between 10% and 15%.
This compares with just 6% who would allocate more than 15% of workplace retirement assets to private assets. Some 7% report being unsure how much they would allocate.
In addition, according to the survey, just 12% of workplace savers consider themselves “very knowledgeable” about private assets. This compares with 40% who are “somewhat knowledgeable,” 30% who are “not too knowledgeable” and 18% are “not at all knowledgeable.”
Other findings suggest that savers broadly understand the most basic aspects of private asset-class investing. For example, 78% of plan participants say that private assets can enhance 401(k) portfolios through diversification, while 73% believe that private assets provide the opportunity for greater investment return. At the same time, 53% say that private assets “sound risky.”
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