Push for Clear Rules on Private Assets in 401(k)s

The Managed Fund Association, a global trade group for the hedge fund and private credit industry, said Thursday it backs the Trump administration's push to let retirement savers shoot for bigger returns and diversify with more private equity, credit, cryptocurrency and real estate assets — but said safeguards must be erected.

The group, whose members include global investors Bridgewater, Blackstone and Apollo, set out a list of principles after President Donald Trump issued an executive order aimed at allowing more alternative assets into 401(k) retirement plans.

MFA's member firms stand to benefit from the executive order, which could open up some of the trillions of dollars that Americans have saved in such retirement plans. Advocates argue alternative assets can offer better returns, especially for younger savers. Critics worry those investments are riskier, less transparent, and carry higher fees than the public equities thee plans traditionally favor.

MFA said access to "a flexible and wide range of options" is best for savers at all stages of their lives and careers as long as there are appropriate safeguards in place.

It said the fees associated with those investments should be evaluated in light of the potential returns, and warned against making plan sponsors select or exclude specific types of asset.

The group also said that "overzealous litigation must be addressed" and called on policymakers to prioritize actions to curb lawsuits that have been blamed for discouraging plan managers from offering this kind of investment.

Wall Street's main regulatory agency, the Securities and Exchange Commission, is working on ways to facilitate these investments while protecting everyday savers from bad actors and fraud, SEC chief Paul Atkins said last week.