Skip to main content

Private markets are poised to reshape the 401(k) landscape

June 4, 2026
3 MIN READ 3 MIN READ

Broader access is only the beginning.

As public and private market approaches converge more meaningfully in retirement investing, the conversation is shifting from access alone to the realities of implementation.

Once largely confined to defined benefit plans, endowments, and other institutional portfolios, alternative investments have long played a role in diversified, long-horizon investment strategies. Defined benefit (DB) plans incorporated private equity, real assets, and other nontraditional strategies decades ago, supported by centralized governance and the ability to manage illiquidity over extended timeframes. By contrast, defined contribution (DC) plans historically remained more insulated from this evolution, shaped by daily liquidity requirements, operational complexity, fee sensitivity, and a cautious regulatory environment.

That dynamic is shifting. 

Advances in investment construction, data infrastructure, and governance frameworks are expanding the range of alternative strategies that can be evaluated within DC plans, particularly through professionally managed solutions.

And while recent policy discourse has raised the profile of the convergence of alternatives and retirement plans, these policy developments merely represent a reinforcement—not the initiation—of this shift.

Looking back on the timeline, the White House issued the executive order “Democratizing Access to Alternative Assets for 401(k) Investors” on August 7, 2025, encouraging plan fiduciaries to more actively evaluate whether alternative investments could play a role in improving long-term retirement outcomes, provided fiduciary principles are maintained. While the order does not mandate adoption or alter ERISA standards, it underscores a broader regulatory openness that aligns with trends already underway across the industry.

That direction was reinforced in March 2026, when the U.S. Department of Labor released a proposed rule aimed at clarifying how fiduciaries can evaluate and select investment options in participant-directed DC plans. The proposal lays out a clear, process-oriented approach centered on documentation, comparison, and ongoing review, and applies across asset classes—including strategies that incorporate alternatives. 

Rather than introducing new requirements or changing ERISA standards, the rule is intended to bring greater transparency around what a well-structured decision process looks like when considering more complex strategies within professionally managed DC solutions.

As a result, asset managers, advisors, and plan fiduciaries are navigating a more complex landscape—one in which private markets and other alternative strategies are moving from consideration toward implementation within retirement offerings. 

Complete the form below to access the full perspective.

Collected to follow global data privacy requirements only

I understand SEI may send future emails to me, even if I opted-out before, and that I can opt-out again later.

This information is not meant to be investment advice. Information provided by SEI Investments Distribution Co.; SEI Institutional Transfer Agent, Inc.; SEI Private Trust Company, a federally chartered limited purpose savings association; SEI Trust Company, which are wholly owned subsidiaries of SEI Investments Company. The Investment Managers Business is an internal business unit of SEI Investments Company. This information is provided for education purposes only and is not intended to provide legal or investment advice. SEI does not claim responsibility for the accuracy or reliability of the data provided.