The Global Push to Open Private Markets to Mainstream Investors

For decades, private markets were reserved for institutions and the wealthy. That’s changing. A wave of retailization — the widening of access to private credit, equity, and real assets — is reshaping long-term savings. In Washington, London, and Brussels, policymakers are rewriting the rules to let ordinary retirement savers hold assets once limited to pensions, endowments, sovereign funds, and wealthy individuals.

In the US, a recent White House directive opened the door for 401(k) and other defined contribution plans to add private credit, equity, real estate — and even crypto — inside retirement funds available to ordinary investors. In the UK, the Mansion House reforms are steering workplace and local-government schemes toward a broader mix of assets. In Europe, the ELTIF (European Long-Term Investment Fund) 2.0 regime is designed to channel household savings into productive, illiquid capital.

The drivers are clear. As private markets become an ever-larger share of the investment universe, keeping them wholly separate from most investors becomes increasingly untenable. Managers want broader, stickier capital after years of dependence on large institutions. Policymakers want retirement savers to benefit from growth beyond publicly traded securities. And platforms are willing to experiment — so long as products can be monitored, operated, and explained at retail standards.

But refashioning private markets for millions of smaller accounts forces changes across the investment chain: product design (valuation cadence, redemption rules, disclosures), operations (daily cutoffs, error handling, participant interfaces), and distribution (the gatekeepers are platforms, not chief information officers).

And all of this is happening without settled rules. Legal duties, platform bandwidth, and political scrutiny make this a live strategic uncertainty for managers and sponsors. Moving early brings a distribution advantage. Moving carelessly risks litigation, reputational damage, and political backlash. Until the regulatory regime settles, even carefully constructed retail products risk retroactive second-guessing.

The US Inflection

Nowhere is this shift more consequential than the United States. Defined contribution plans hold more than $13 trillion, of which more than $9 trillion sits in 401(k) plans — mostly in vehicles offering exposure to listed stocks and publicly offered bonds.¹ They’re the largest untapped channel for private funds and the one most tightly bound by fiduciary law.

Under the Employee Retirement Income Security Act of 1974 (ERISA), plan sponsors must meet the disciplines of prudence, loyalty, and documentation and avoid nonexempt statutory prohibited transactions. ERISA section 404(c) shields participant-directed trades but doesn’t protect fiduciaries from the duty to prudently select and monitor the plan’s investment menu or default or avoid nonexempt prohibited transactions.

The policy’s posture has changed. A 2025 executive order on alternative assets² directed agencies to clarify³ whether and how private market exposures can be included in 401(k) and other defined contribution plan menus and defaults; how fiduciaries should handle valuation, liquidity, fees, and monitoring; and whether liability protection is warranted. ERISA itself remains in place, but the political and legal guardrails are shifting — and will likely be tested in court, including challenges to any Department of Labor (DOL) safe harbor under Loper Bright.⁴

The real question isn’t whether private assets belong in retirement plans, but how can they be engineered to fit. While registered funds offering private market exposure (interval or tender offer funds) could be stand-alone menu options, the more workable model is different: a small, governed slice embedded inside a larger multi-asset fund — a target-date strategy or managed account — so plan participants can transact in the overall option as often as they currently can. In industry shorthand, that slice is a “sleeve.” The “wrapper” is the legal structure (registered mutual funds, interval or tender offer funds, or collective investment trusts) that makes the sleeve operable in a plan context.

That design lane is narrow and comes with strategic uncertainty. Valuation cadence, liquidity buffers, and plain English disclosures — straightforward explanations of what the private slice does, how it is priced, and what could occur under stress — must all withstand scrutiny from fiduciaries, regulators, and eventually courts.

What Scales (and Why)

The scalable path runs through daily-priced defined contribution funds with small private sleeves that are sized so the whole option still behaves like a daily instrument. The mechanics are complex, but the principle is simple: The private slice can’t break the participant experience. Securities and banking law will shape the wrapper. Interval and tender offer funds may offer flexibility, but they must still sit comfortably inside a daily-priced strategy and — more importantly — can’t offer daily liquidity by law. Aligning those constraints with participant expectations for a defined contribution plan will be a significant challenge.

Partnerships are already forming. Public market managers bring wrappers and distribution reach; private market specialists bring sourcing and market expertise. Early alliances — Blackstone with Vanguard and Wellington; Goldman Sachs with T. Rowe Price — show how the pieces can be combined. The test isn’t branding but execution: file specs, cutoffs, reconciliation, error handling, and plain English disclosures.

Policy is moving, platforms are choosing, and courts will judge later. That timing mismatch is the strategic risk. Waiting for clarity may mean missing scarce shelf space. Moving too fast risks being remembered for the first stumble. Any liability comfort that emerges will be fragile, tested in litigation, and vulnerable to politics. Managers must proceed as if the rules could tighten after launch.

Gatekeepers, Optics, and Operational Discipline

Early flows will not spread evenly. They’ll likely cluster in the largest brands, which would reassure fiduciary committees but concentrate influence and raise political scrutiny. This could also invite further tests of litigation safe harbors by plaintiff firms. If retirement savers see fees rise or performance stumble, expect bipartisan interest in whether private markets are delivering benefits to participants or simply entrenching incumbents. Registered structures, comparable reporting, and plain English explanations give fiduciaries cover and participants confidence. Anything less risks backlash that could slow the market for years — or invite intrusive regulation of private markets directly.

The sleeve-inside-wrapper approach lives or dies on disciplined operations and communication. Sizing sleeves conservatively helps the fund remain stable when private markets lag or flows are uneven. Several other elements are important: clear valuation policies, independent checks, and documented overrides; sufficient liquidity buffers and pre-committed rules for liquidity tools; operations that meet daily cutoffs and resolve errors without bespoke fixes; and disclosures in plain English. Investor education is key to aligning expectations with the limited liquidity that accompanies newly selected exposures.

What to Watch

The next signals will come quickly. How do early products behave when markets turn messy — do valuations keep pace, do redemption tools hold? What does the DOL do next — issue narrow guidance on diligence or attempt a broader safe harbor? How does the SEC (U.S. Securities and Exchange Commission) handle investor definitions and guardrails for private market products inside multi-asset options? And when the first lawsuits come, do they target fees alone or probe valuation lag and liquidity?

Retailization is no longer a theory. It is advancing across the UK, EU, and US. The opportunity is enormous, but the rules are unsettled and the gatekeepers are selective. Distribution will favor those who move early. Trust will favor those who design for stress. The funds that manage both will define what “fit for purpose” means in retirement investing.

*  *  *

Check out the next article, “Mass Arbitration: The Risk Lurking in Consumer Agreements,” explore our full collection of insights into legal dynamics disrupting modern business strategy, or subscribe to Forces of Law to receive our latest publications.