Private Equity Eyes 401Ks as Trump Takes Office

Reportedly, $12-$13 trillion is sitting in Americans’ 401K plans. Traditionally these funds have been restricted to public investments such as mutual funds or index funds managed by a financial services advisory group like Vanguard.

But many in the private equity industry hope a second Trump administration may change that by allowing holders of tax-deferred 401K retirement plans to access an array of private investments such as leveraged buyouts and private loans. According to this Financial Times piece, private equity lobbyists plan to “hit the ground running” in terms of getting the new administration to consider the rule change.

The traditional view has been that these less regulated spaces were simply too opaque and risky for small investors to safely evaluate and negotiate. But that also denies smaller investors a chance for the more lucrative returns and diversification that private markets offer, something large and institutional investors have been taking advantage of for years. The change would also offer PE firms the chance to tap a huge new pool of investment dollars while potentially kicking off a new round of growth for the space.

Marc Rowan, CEO of asset manager Apollo Global Management, stated the case for the change in terms of diversification: “I jokingly say sometimes, we levered the entire retirement of America to Nvidia’s performance. It just doesn’t seem smart. We’re going to fix this and we are in the process of fixing it.”

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Source: Antoine Gara | "Private equity to lobby Donald Trump for access to savers’ retirement funds" | The Financial Times | 01/25/2025 | Visit