After several years of hype and experimentation Retirement Plans
While adoption is currently limited, the 401(k) sector is exploring the use of advisor-managed accounts utilizing CITs. Panelists estimated that private allocations in defined contribution plans currently total approximately $100 billion out of roughly $15 trillion in assets. They projected a 5% to 10% shift toward private assets over the next five to 10 years, which could increase that total to $600 billion by 2030.
“All of those forces are coming together, which is now opening the door to implement private markets in 401(k)s and address constraints that have come before,” said Michael Esselman, CIO at One Digital.
However, experts predicted that only a select group of managers will provide funds containing private assets. For instance, companies backed by private equity that are already accustomed to private markets may be more inclined to offer these options within their retirement plans.
They also highlighted several partnerships announced by asset managers aimed at creating products for the retirement market, though many of these funds have yet to launch.
“There’s not a lot of choice or variety (yet),” said Sean Murray, head of retirement with Cliffwater. “But these partnerships are out there, and there will be more off-the-shelf target date funds with privates. … In addition, there will be advisor account solutions where you can build customized model portfolios.”
Private Credit Weathers the Storm
Although the wealth channel has reduced some exposure to private credit, investment flows have not ceased.
Tim Donaldson, managing director of platform solutions at CAIS, reported that private credit fell from 40% of CAIS platform volume in 2024 to 33% in 2025, and currently sits at 15%. Donaldson noted, however, that this decline may partly reflect firms diversifying their initial private-market allocations into other areas, such as growth equity, late-stage venture, and infrastructure.
“Private credit remains a core component of diversified private markets portfolios,” Donaldson said. He added that 77% of the 102 custom model portfolios managed by RIAs on the CAIS platform include private credit.
Panelists characterized the current market as undergoing a “healthy reset.” The change in interest rates, for example, has shifted conditions from borrower-friendly to lender-friendly within the middle and lower-middle-market direct lending space. This has created favorable entry points for managers with strong fundraising capabilities.
Firms are becoming more deliberate about defining the role of private credit in client portfolios and are investigating a wider array of opportunities. While early allocations centered on direct lending, demand has expanded to include legal finance, royalties, real asset lending, and other sectors.
“In terms of private credit, we’re telling them this is an appropriate asset allocation class,” said Bob Hostetter, chief investment officer at VestGen Wealth Partners. “However, we are not going to introduce non-daily liquid investments for clients that are under an accredited status. Accredited is where we would prefer to start with privates. When appropriate, we also like allocating in the qualified space. We have a lot of clients who are former high earners. As folks get later in life, private credit becomes a good source of income.”
