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Fund Spy

Private Equity and Target-Date Funds: An Unrequited Love Story

Private equity managers long for target-date funds, but the asset class' high fees and operational challenges keep it in the friend zone.

According to the 2021 Investment Company Factbook, private equity managers haven't yet managed to crack the $7 trillion U.S. 401(k) defined-contribution market. The U.S. Labor Department created an opening in 2020, though, when it said defined-contribution plans could offer private equity if it's within a professionally managed multi-asset-class fund, like a target-date strategy.