KBRA has released research examining President Donald Trump’s executive order aimed at easing regulatory barriers that have long restricted defined contribution (DC) retirement plans from investing in alternative assets. If enacted, the move could extend access to millions of retirement savers—aligning their investment options more closely with defined benefit (DB) plans, where alternatives already make up a significant share of portfolios. 

The report underscores the potential fairness of this democratization, as DB participants often hold 20% to 25% or more of assets in alternatives, while most DC savers remain locked out. KBRA notes that diversified exposure to private assets can enhance long-term outcomes, but cautions that alternatives also carry higher fees, less liquidity, and significant dependence on manager selection—pitfalls that could dampen rather than improve retirement security. 

Drawing lessons from institutional investors, KBRA highlights the risk of underperformance when investing in bottom-quartile funds compared to passive public market exposure. The report also points to the potential role of secondary funds, funds of funds, and benchmarking vehicles—spurred by recent acquisitions of Preqin and Burgiss by BlackRock and MSCI—as scalable ways to broaden access. Additionally, KBRA notes the growing appeal of perpetual private asset strategies, which could increasingly attract retail retirement capital. 

Connect Money will spotlight rising stars who have made a valuable contribution to the alternative investment industry. Based on your nomination, we will recognize professionals who have significantly influenced both the workplace and community. The deadline is September 10. Click here to submit your nominations.