A magnifying glass on a a collection of charts with the term "private equity" in it.
A significant portion of workplace retirement plan participants said they would invest in private equity or private debt if the option were available to them, according to Schroders’ 2025 U.S. Retirement Survey. Forty-five percent of plan participants surveyed said they would invest in these options if they could, up from 36% in 2024, and 77% of those interested said they would increase contributions to their plan.
However, less than one-third of plan participants said they expect private assets to be available in their plan within five years. In addition, the survey revealed limited knowledge about private assets as well as a fairly prevalent perception that private assets are risky.
The findings come weeks after President Donald Trump signed an executive order paving the way for alternative assets, including private equity, real estate and cryptocurrency, to be included in 401(k) retirement accounts.
“For decades, traditional pension plan portfolios have mixed public and private investments in the same portfolio to meet their obligations to retirees,” said Schroders head of US defined contribution Deb Boyden. “On the heels of the recent executive order directing the Labor Department to consider improving access to alternative assets for defined-contribution 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.”
Employees who are interested in investing in private assets through their workplace retirement savings plan favor a gradual approach to incorporating them into their portfolio. Half said they would allocate less than 10% of their workplace retirement assets to private assets, while 36% said they would allocate between 10% and 15% of assets. Only 6% would allocate more than 15% of assets to private options and 7% were unsure.
Schroders said there is a need for more education about the potential incorporation of private assets in retirement savings plans. Only 12% of plan participants consider themselves very knowledgeable about private assets, while 40% said they are somewhat knowledgeable. Thirty percent said they are not too knowledgeable and 18% said they are not at all knowledgeable.
“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,” said Boyden. “As the traditional barriers to entry are removed and access is potentially improved through defined contribution plans and other investment vehicles, the quality and quantity of investor education resources must improve.”
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