The spread of alternative assets to 401(k)s will be slow because of “the nature of the market,” said Kevin Chisholm, associate director at Cerulli.
BlackRock Inc., Fidelity, T. Rowe Price Group Inc. and Vanguard Group Inc., four of the largest providers of target- date funds in 401(k)s, said they have no imminent plans to add private equity or hedge funds.
Rubenstein’s Vision
The added cost and complexity of alternatives have kept T. Rowe Price from including them in its target-date series, said Richard Whitney, director of asset allocation at the Baltimore- based firm. Still, over time, there will be a convergence of practices seen in pensions with those in 401(k)s, he said.
“I believe in the future non-accredited investors will ultimately be able to invest in private equity,” Carlyle co- founder David Rubenstein said in a September interview. “It will be possible in the future where 401(k) check-off plans will be able to say, you can take a certain amount of your money a year and go into an illiquid private-equity fund.”