U.S. President Donald Trump waves from the roof of the West Wing of the White House as he takes a tour on August 05, 2025 in Washington, DC.
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President Donald Trump signed Thursday an executive order that lays the groundwork to add alternative assets such as private equity, cryptocurrencies and real estate into 401(k)s.
The executive order directs the U.S. Secretary of Labor to review fiduciary guidance on private market investments in 401(k) and other defined contribution plans that are governed by the Employee Retirement Income Security Act of 1974, or ERISA. The federal law sets minimum standards for most retirement plans.
The executive order marks a major victory for the alternative asset industry, which has pushed for greater adoption of private assets in defined contribution plans under Trump’s second term in office. Though it also brings with it new risks for investors.
Bitcoin jumped Thursday in response to the news.
Private market assets have traditionally been excluded from 401(k)s, even as they’ve been embraced by pension funds and university endowments, because their high fees, lack of transparency and longer lockup periods make them riskier investments.
Yet, private market exposure in 401(k) plans was considered permissible in 2020, when the Department of Labor under the first Trump administration issued an information letter saying it could be appropriate for defined contribution plans under certain conditions. The guidance was later affirmed by the Biden-directed agency.
Its presence has already grown. Asset managers and plan sponsors have created products for retirement vehicles in which Americans collectively hold roughly $8.7 trillion in assets, according to data on 401(k)s at the end of the first quarter of 2025 from the Investment Company Institute.
In June, BlackRock, the world’s largest asset manager, said it’s launching a 401(k) target-date fund in the first half of 2026 that will include a 5% to 20% allocation to private investments. In May, Empower, the country’s second-largest retirement plan provider, said it’s joining asset managers such as Apollo to start allowing private assets in some accounts later this year.
BlackRock and Apollo both traded higher earlier Thursday, but the stocks gave up those gains. BlackRock closed down 0.7%, while Apollo shed 3.3%. KKR fell 1.6%.
— With reporting by CNBC’s Megan Cassella.
