President Trump is planning to issue an executive order to increase access to private investments in 401(k) retirement accounts, according to the Wall Street Journal. While some retirement plans already provide access to private companies, some plan sponsors are fearful of litigation over the high fees that private investments require.
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“We’ll likely need to see litigation reform, or at least some advice reform in the U.S. to add private markets exposure,” said BlackRock (BLK) finance chief Martin Small.
Access to private companies has historically been much more restricted than access to public companies. While it carries risks, the order could provide investors more flexibility to invest in private unicorns like SpaceX, OpenAI, and Anduril.
Trump’s Plan could Unlock Trillions for Private Companies
Sources close to the matter said that the order would lead the Labor Department and the Securities and Exchange Commission (SEC) to provide guidance to employers and retirement plan sponsors on how to incorporate private investments.
U.S. defined-contribution plans had $12.4 trillion in assets under management as of 2024. Private market access to these funds would bolster the industry. It would also open up a new source of capital to private asset managers, like Apollo Global Management (APO) and Blackstone (BX).
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