3 Wall Street giants target 401(k)s with new private equity access

Three of the world's largest alternative asset managers are teaming up to channel private market investments into U.S. defined contribution plans, a move that could unlock a portion of the nearly $9 trillion in retirement savings for a new set of products.

"We're pleased to bring together Brookfield, Carlyle and AB to provide a turnkey private markets solution to DC plans that gives retirement savers an allocation to private markets that dynamically adjusts by age," said Onur Erzan, President of AllianceBernstein, in a May 20 statement.

The "ABC [ONE]" platform, announced Wednesday, will see AllianceBernstein (AB) manage the overall allocation and a private credit sleeve, with Brookfield Asset Management running private real assets and Carlyle Group managing private equity. The solution is designed to be added alongside existing target-date funds, with AB using its glide path expertise to adjust exposure based on a participant's age. The firms collectively manage over $2.3 trillion in assets.

The collaboration aims to capture a slice of the $8.7 trillion held in 401(k) accounts, offering potentially higher returns and diversification as a recent executive order clears the way for alternatives in retirement plans. However, it also introduces higher fees, complexity, and liquidity risks previously walled off from the average saver.

The move follows a significant policy shift starting with Executive Order 14330 in August 2025, which directed regulators to remove barriers to alternative assets in 401(k)s. The Department of Labor followed up with a proposed safe harbor rule on March 30, 2026, which could be finalized by year-end. This regulatory opening is allowing firms like AB, Brookfield, and Carlyle to offer products historically reserved for accredited investors, who typically need a $1 million net worth or $5 million in investments.

A Tale of Two Savers

The push into private markets highlights a stark divide in retirement readiness. While the average 401(k) balance was $167,970 at the end of 2025, the median was just $44,115, according to industry data. For a high-balance saver, a small allocation to illiquid, high-fee private equity is a diversification play. For a saver with a sub-$50,000 balance, the higher fees and lock-up periods present a much greater risk, a point raised by critics. "The new rules open up that treasure chest, enriching a few while putting many of us at risk," wrote one concerned retiree in a recent letter to the editor.

The industry argues this access is necessary in a world of lower expected public market returns. With the personal saving rate falling to 4.0 percent in the first quarter of 2026 and inflation gauges like Core PCE rising, finding new sources of return is critical. "By incorporating private market assets with professionally managed DC retirement solutions... ABC [ONE] seeks to offer the potential to enhance returns and improve diversification," the companies said in their joint release.

The "ABC [ONE]" solution is a turnkey product, meaning it will likely be embedded within target-date funds or managed accounts rather than offered as a standalone choice. This structure helps plan fiduciaries manage risk by capping exposure to a small percentage of a participant's portfolio. It also operationalizes the complex valuation and liquidity management required for private assets, which lack the daily pricing of public stocks and bonds. AB, which has over $100 billion in custom target-date solutions, will use its existing recordkeeper relationships to deploy the product.

This article is for informational purposes only and does not constitute investment advice.