Up to One-Fifth of DC Plans Might Invest in Private Markets by 2035

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Retirement plan sponsors are expressing a significant interest in adding private markets exposure to DC plans, according to the 2025 “Cerulli Edge—U.S. Retirement Edition” report from Cerulli Associates. Based on its survey data, Cerulli estimates that within a decade, up to one-fifth of DC plans will have such exposure, either through target date funds or managed accounts incorporating private assets.

A 2025 Cerulli survey of 966 retirement plan sponsors found that 37% stated they were very interested in learning about the pros and cons of incorporating private market assets through either a target-date fund or a managed account. The interest was strongest among sponsors with between $250 million and $1 billion in assets, at 57%. Plan sponsors in this group likely have more dedicated staff to make informed investment decisions about private market investment options than their smaller counterparts, according to Christopher Bailey, director at Cerulli Associates.

However, interest in private markets is somewhat tepid among small and medium-sized sponsors (in the 30% to 37% range) and among sponsors with over $1 billion in assets (35%). The larger plans might already have some form of allocation to private market assets, Bailey noted.

These findings come amid a push by the Trump administration to include private market assets in retirement plans, including an executive order directing government regulators to facilitate this for DC plan sponsors. While private market asset allocations are already utilized in pension plans, 401(k) plan sponsors have generally avoided such investments due to concerns about inadvertently violating the Employee Retirement Income Security Act. SEC Chair Paul Atkins and Commissioner Mark Uyeda have also spoken out in favor of allowing private market investments in DC plans “within reason.”

An earlier Cerulli survey, conducted in 2024, found that approximately 20% of plan sponsors had already discussed incorporating private market investments into their plans with their consultants or advisors. 

Asset management and DC consultants surveyed by Cerulli forecast that by 2030, 7% of plan sponsors will have a private markets allocation through a target date fund or a managed account. By 2035, that figure might rise to 17%, respondents predicted. 

Some asset managers have already developed products for the space. Apollo Global Management CEO Marc Rowan has talked about developing products for 401(k)s. Last April, State Street Global Advisors, the asset management arm of State Street Corp., launched target-date funds with exposure to private markets. In May, Empower, the country’s second-largest provider of workplace retirement plans, announced a partnership with private investment fund managers and custodians to offer investments through collective investment trusts. Then, in July, Goldman Sachs Asset Management launched the Goldman Sachs Collective Trust – Private Credit Fund. In October, Blackstone Inc. created a new group focused on developing funds for retirement accounts. 

However, 84% of plan sponsors indicated cost was a significant concern about incorporating private market assets into their DC plans, while 76% cited liquidity and 72% valuations as other major concerns. In particular, plan sponsors fear they could face litigation if they add private market assets to their plans. Bailey brought up the example of Intel Corp., which faced a lawsuit in 2019 for investing some of its retirement plan money in hedge funds and private equity funds because it violated ERISA. That lawsuit was dismissed in May 2025, but plan sponsors are sensitive to the fact that even if they are making the right decision for their clients, they do not want to deal with the expense and hassle of a lengthy lawsuit, Bailey noted.

In addition, plan sponsors are slow to adapt to changes. In 2025, 22% of surveyed sponsors changed one or more of their core menu options, and only 4% changed their target date managers. However, a large majority (77%) conducted investment due diligence reviews.

For private investments, plan sponsors need both more education on how private investment options work and what role they will play in their portfolios, as well as some time to observe how such investments perform in DC plans, Bailey said. That would require a three- to five-year horizon and more private market options so sponsors can pick and choose which plans work best for their participants.

“How will one of these investments going to work through a market cycle? ‘You told me you can manage liquidity. Now, show me how you are going to do it,’” is the mindset, according to Bailey. “And if you only have one investment [option] with private market assets, is it the best it could be, is it the worst it could be, is it somewhere in the middle? It benefits the industry to have more of these things out there being used.”

Cerulli researchers forecast that target date funds will be among the first private market options adopted by DC plans, as 78% of plan sponsors already use such funds as qualified default investment alternatives. Target date funds also present fewer operational hurdles than other options for private market exposure.