Defined-contribution plans such as 401(k)s let workers and employers contribute to a retirement account that’s run by the employee. The individual’s investing decisions directly affect his or her retirement income. Traditional pension plans, known as defined-benefit plans because they promise a lifetime payment, pool large amounts of money and usually have professional managers to invest it in a variety of assets.

Fundraising Woes

Traditional pensions -- the California Public Employees’ Retirement System is the largest in the U.S. -- are among the biggest investors in private equity, though they have become more selective after losses during the 2007-2009 financial crisis. Private-equity funds raised $312 billion globally last year, less than half the $669 billion gathered in 2007, according to data from London-based research firm Preqin Ltd. Fundraising closed after an average of 17 months in 2012, compared with 12 months in 2007, according to Preqin.

With traditional investors reluctant to commit new money, firms are getting more serious about accessing individual retirement plans, which have been a reliable source of growth for traditional asset managers such as Boston-based Fidelity Investments.

$5 Trillion

Assets in 401(k)-type plans will grow about 6 percent a year to $5.03 trillion by 2016, surpassing the $4.9 trillion projected for public pensions and widening their edge over private pensions, according to Boston-based research firm Cerulli Associates.

KKR last year started two debt funds for individual investors. The Alternative High Yield Fund, which became available in November, is an open-end fund with a $2,500 minimum investment and the option to withdraw money daily. The Alternative Corporate Opportunities Fund is an unlisted closed- end fund with a minimum investment of $25,000 and quarterly liquidity. The funds, which will invest in assets such as high- yield bonds and bank loans, are the first pools managed by KKR that are structured like mutual funds.

The firm, founded in 1976 by Jerome Kohlberg and cousins Henry Kravis and George Roberts, is close to being able to add the high-yield fund to its own 401(k) plan through Fidelity, according to a person familiar with KKR’s plans. KKR views that as a step toward offering the investments to other Fidelity 401(k)-plan participants, said the person, who asked not to be identified because the information isn’t public.

Nicole Goodnow, a spokeswoman for Fidelity, declined to comment. Fidelity is the nation’s largest provider of 401(k)s.

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