Defined-contribution plans are currently restricted from investing in alternative assets such as private equity and cryptocurrencies due to fiduciary duty concerns. Trump’s new executive order aims to reevaluate these restrictions by directing the Department of Labor and SEC to facilitate investment in alt assets. This could open trillions of dollars for investment, benefitting both private equity and cryptocurrency markets. However, retirement plan administrators may hesitate due to high fees and lack of transparency in these asset types, necessitating caution until rule changes are finalized.
Trump's new executive order will direct the Department of Labor to reevaluate existing rule interpretations and propose regulatory changes for retirement fund investments into alternative assets.
Opening defined-contribution plans to alternative assets like private equity and cryptocurrencies could unlock trillions of dollars in new investment opportunities.
Many longtime limited partners in private equity are questioning commitments due to declining distributions, while adding 401(k) investments could significantly replenish these funds.
While the executive order aims to facilitate greater investments in alt assets, there remains skepticism about the maturity of the crypto and private credit markets.
Collection
[
|
...
]