Participants say yes to private markets; committees still own the default

Sixty-five percent of defined contribution plan participants say they would be interested in a target-date fund carrying a modest private-markets allocation, a number that will be quoted for the next year as proof the demand question has settled. The number that complicates it appears in the same Invesco Summer 2026 DC Participant Pulse Survey, fielded with Ipsos across 517 participants at employers with 1,000 or more workers: 93% of participants accept that private markets typically cost more for the chance at higher returns, and only 58% view that exchange positively.

The distance between those two answers is where the product work sits. Participants are not uninformed about the fee trade-off; they are nearly unanimous in recognizing it and split on whether it is worth taking, and risk tolerance is the leading factor shaping their openness to private markets, which is to say the participants who want the sleeve are the ones already comfortable with risk and a fee illustration is unlikely to convert the rest.

Participants said they wanted a menu of private lending, infrastructure, real estate and private equity, reached through a professionally managed retirement solution rather than their own fund selection, and 65% expressed interest in a target-date fund with a modest private-markets allocation. That number will travel farthest, but it says the least about near-term flows, because participants do not shop for target-date funds; they are enrolled into them.

The Winter 2026 pulse found 86% of participants either definitely interested in or open to private markets in their workplace plan, pending more information on risks and fees, but the two waves asked different questions and the percentages should not be charted against each other—reading 86% down to 65% as eroding appetite would mistake two separate questions for one trend. Invesco has simply returned to the same subject twice in one year, which is what building a case with plan sponsors ahead of shelf space looks like.

Frank Dotro, Invesco's head of North America institutional and retirement, put education at the center of the result, saying sponsors need to pair thoughtful investment design with clear, practical education so participants understand the role private markets can play in a retirement portfolio; Keith Jones, who leads private markets product globally at the firm, said inclusion in DC plans gives participants access to opportunities that have historically been limited. Education is the standard answer, and the survey is a little awkward for it, because education moves people from not knowing to knowing and 93% already know. If the constraint is the 58% who have weighed the fee and declined, the levers are sleeve size, price and the shape of the glidepath—calls made in a committee room, not in a participant webinar.

Participants do not select a glidepath; they are defaulted into one, and the committee that owns the qualified default investment alternative is the real buyer. Recordkeeper shelf decisions rather than asset-manager brand now determine who wins the target-date market, as this publication has argued, and read that way the 65% is a permission slip—cover for a committee to add a private sleeve, cover for a recordkeeper to put one on the menu—and it obligates neither.

Collective investment trusts hold 55% of the $5.3 trillion target-date market, and a small private allocation with a long lockup and a fee that must justify itself against an index-heavy glidepath fits a CIT's structure better than a mutual fund's daily-priced share class does; the wrapper also narrows the field to managers holding existing CIT shelf relationships and the private-markets manufacturing to fill them, a shorter list than the roster of firms that would like to be in the business. Invesco's own August was busy in its own right—a fund launch, an executive change and two deal announcements, per RCD's tracking—and survey work and product launches travel together in this business.

The sample does not cover small plans: all 517 respondents worked at organizations with 1,000 or more employees, the segment where investment committees retain consultants, lineups are already customized, and managers are actively shopping a private sleeve. The plans where a default does the heaviest lifting—smaller employers running off-the-shelf lineups with no consultant in the room—are absent from the data, and a survey of the segment most prepared to adopt private markets is a survey of the segment that needed the least persuading; the coverage does not say whether Invesco plans to extend the research to smaller plans.

Which of the four strategies earns the first three points of allocation is a design question the survey does not answer, and it is not a small one, because a private-lending sleeve and a buyout portfolio behave differently behind a glidepath—one collecting contractual income, the other marked periodically—and the first sleeve a committee adopts sets the template for the ones that follow.

The survey also found participants open to artificial intelligence in retirement planning, with a preference for a copilot arrangement that keeps humans involved and comfort with AI handling portfolio monitoring, rebalancing and risk assessment. That points the same direction as the private-markets finding: participants will accept a more sophisticated allocation, and a fee for it, provided the decision is made on their behalf by something they can hold accountable, and the published account of the survey goes no further than that.

Two waves in one year have largely finished the job of persuading participants, if the survey is measuring what it claims to. The next number that matters is a QDIA decision at a handful of recordkeepers, and it will not arrive as a survey result; it will arrive as a lineup page—a sleeve, a percentage, a fee line—which is where a sponsor or its consultant will look to see whether any of this is real.