President Donald Trump has signed an executive order that could reshape the investment landscape for U.S. retirement savings, granting 401k plans access to private equity, cryptocurrencies, and other alternative assets for the first time on a broad scale. The move potentially affects the financial future of more than 90 million Americans, unlocking new opportunities for diversification while also exposing savers to greater risks.
The decision follows extensive lobbying from major private capital and asset management firms, including Apollo Global Management, BlackRock, Carlyle, and Blackstone. These firms have long sought access to the $9 trillion held in 401k accounts, viewing retirement savings as a significant source of fresh investment capital. The new policy is expected to channel funds into a variety of non-traditional assets such as corporate takeovers, private loans, and infrastructure projects—sectors that typically carry higher fees, less transparency, and lower liquidity compared to traditional stocks and bonds.
Proponents argue the change will “democratize” investment opportunities that have historically been limited to wealthy individuals and institutional investors. “Wealthy clients have had access to this space for a long time,” said Carlyle CEO Harvey Schwartz, calling the reform “long overdue.” BlackRock echoed the sentiment, stating the inclusion of private investments would help millions of Americans build “stronger, more diversified portfolios.”
Critics, however, warn the shift could expose unsophisticated investors to complex and risky assets. Benjamin Schiffrin of Better Markets called it “a bad thing” for 401k holders, stressing that many may not fully understand the risks involved. Private equity investments are often harder to value, can take years to sell, and are known for high management fees.
The White House’s National Economic Council and Council of Economic Advisers worked closely with the private capital industry in crafting the order, with input from Deputy Chief of Staff Stephen Miller. The administration’s interest in cryptocurrency regulation also influenced the decision. Trump has made digital asset deregulation a priority, crediting the industry with contributing to his 2024 election win.
The order instructs federal agencies to make it easier for 401k plan managers to offer alternative investments, including legal protections to limit lawsuits from plan participants over losses in private or digital assets. Historically, many managers avoided these assets due to fear of litigation, even without explicit rules against them.
The Department of Labor, which oversees employer-sponsored retirement plans under the 1974 ERISA law, is expected to issue guidance within six months. In anticipation, asset managers are forming partnerships to create new products blending public and private investments. Examples include:
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Empower partnering with Apollo, Goldman Sachs Asset Management, and Partners Group.
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BlackRock developing target date funds with private assets for Great Gray Trust and working on its own public-private funds.
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Blackstone teaming up with Vanguard and Wellington Management for strategic alliances.
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KKR and Capital Group exploring mixed-asset model portfolios.
While the potential for higher returns and diversification appeals to some, experts caution that these benefits come with higher costs. Michael Pedroni of Highland Global noted that Americans currently pay 30–50 basis points in annual 401k fees, but private asset management could push costs to 80 basis points or more. “Will they be willing to pay that?” he asked.
With the policy now in place, the U.S. retirement system is set for one of its most significant shifts in decades—one that could bring both new opportunities and new vulnerabilities for millions of savers.
