Does Private Equity Belong in 401(k)s?

Win / Loss analysis article

Private equity players are targeting the 401(k) industry. Will industry insiders welcome them with open arms, turn their noses up, or something in between?

Market research shop Anova Consulting Group is trying to answer that question. They just launched a syndicated study entitled Private Equity in DC Plans: Retirement Industry Perspectives.

The firm intends to “capture the perceptions and concerns of key stakeholders regarding the potential introduction of private equity investment options onto DC platforms,” as private equity firms look for ways to tap into the individual investor retirement plan market and plan sponsors weigh various options to increase retirement readiness among their participant bases.

“Private equity funds and defined contribution plans have not historically shared much common ground, so it will be interesting to see how receptive plan sponsors, advisors, and plan providers are to the concept,” stated Richard Schroder, president of Anova. “There are certainly some operational as well as cultural challenges facing private equity firms who wish to sell their investments in retirement plans, but there may also be opportunities, especially given the growth of target date funds and automated plan features. This study will help to flesh out challenges and opportunities and create a roadmap with ideas on how the trend might play out.”

Likely subscribers to the study include private equity firms, retirement plan providers, and retirement plan consultants / advisors. Pre-subscribers who enroll by June 14th will be invited to offer input into the topics covered and research questionnaire.