Advisers to nearly double private assets as DC plans stall

U.S. financial advisers already hold $2.2 trillion in private capital that does not trade daily. Cerulli Associates projects they will add another $2 trillion over the next five years. Defined contribution plan sponsors have barely started. PLANADVISER, citing Cerulli and a companion survey from Escalent's Cogent Syndicated division, reports that only 3 percent of 401(k) sponsors currently offer alternatives. That same survey finds 44 percent of sponsors describing themselves as extremely interested in alternatives.

Advisers have figured out how to put private assets in household accounts, through managed accounts, model portfolios and semi-liquid vehicles. Plan sponsors have not. The Department of Labor's safe harbor for private assets in DC plans depends on a 'meaningful benchmark' that private funds have not produced, as this publication has reported. The adviser channel has not paused to wait for that benchmark.

Ninety-three percent of the asset managers Cerulli surveyed point to greater availability of private-market products as a growth driver over the next three years. Sixty-seven percent say advisers need to demonstrate value to clients. Fifty-seven percent cite demand for income-producing investments. Cerulli expects access to expand through partnerships spanning traditional asset managers, private-market firms, technology platforms, TAMP providers, trust companies and recordkeepers. Those channels are already moving: MissionSquare, a recordkeeper, added a brokerage and robo-adviser for participant households, and Edelman placed an M&A veteran atop its retirement unit, as this publication reported earlier this month.

Interval funds are the semi-liquid market's main vehicle. Seventy-nine percent of the asset managers surveyed already offer them. At the end of 2025, interval fund assets stood at roughly $132 billion. They were spread across 147 funds. That installed base lets an adviser put private capital in an account without asking the plan sponsor to change its menu.

Escalent's survey of sponsors shows where appetite sits. Plans with $100 million to $500 million in assets show the strongest appetite. In that group, 62 percent are eager to learn more about alternatives. Mega plans, defined as $500 million or more, are less eager. Fifty percent of them want to learn more. Sponsors who already want alternatives name hedge funds, private credit and private equity. Each drew 75 percent interest.

The fee findings read like a negotiation the industry has not settled. Among sponsors interested in alternatives, lower fees are the most common motivation, cited by 35 percent. Among sponsors steering clear, high fees are the most common barrier, cited by 33 percent. Small plans — those with $5 million to $20 million in assets — are the most fee-motivated. Thirty-seven percent of them cite lower fees as the reason. For small and midsize plans, high fees are the top obstacle, also 33 percent. The same pricing is doing opposite work in the two groups' minds; the argument is still being made.

Cerulli sees roughly $2 trillion of adviser-side growth over the next five years. Escalent sees plan-sponsor adoption at 3 percent today. The bridge between those two numbers, if one is built, will look like a benchmark. Private-markets firms have not produced one, and the DOL safe harbor is built around exactly that missing piece. The 44 percent who are extremely interested will not get what they want until that benchmark shows up. Adoption stays near 3 percent.