AB, Brookfield and Carlyle Launch Private Markets DC Solution
A new collaboration to deliver a turnkey private markets solution for Defined Contribution (DC) plans providing broader asset class diversification to retirement savers was announced today by AllianceBernstein Holding L.P., Brookfield Asset Management, and Carlyle.
Designed for implementation alongside an existing target-date fund or managed account solution, “ABC [ONE]” is intended to be a single source of private-markets exposure for a DC plan’s Qualified Default Investment Alternative (QDIA).
“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.”
Onur Erzan, President of AllianceBernstein
The solution will dynamically adjust private asset allocations across private credit, private real assets and private equity, depending on a participant’s stage in their retirement-savings journey.
“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. “For more than a decade, AB has been incorporating private assets in custom target-date funds, in both the US and the UK. Based on our investment research and hands-on experience, we believe that when a plan decides to include them, it’s critical to optimize the deployment of these assets for DC participants.”
AB, a leader in glide path design and asset allocation with $105 billion in AUM in custom target date solutions, will manage the allocation to the three private market asset components alongside the plan’s existing QDIA, based on participants’ ages and preferences.
Global alternative investment firm Brookfield will manage the private real assets component, global investment firm Carlyle will manage the private equity component, and AB will manage the private credit component.
“We are excited to bring the breadth of Brookfield’s private strategies to the defined contribution space, alongside a market-leading target-date manager,” said Connor Teskey, CEO of Brookfield Asset Management. “With more than 125 years of experience owning, operating and investing in the infrastructure, energy and real estate assets that underpin the global economy, we believe private real assets offer compelling diversification benefits and differentiated return drivers that can support more stable, resilient long-term outcomes for DC participants.”
A press release today adds that ABC [ONE] is built to address changing market dynamics, with inflation-adjusted returns expected to be lower in the decade ahead and public markets offering less diversification. By incorporating private market assets with professionally managed DC retirement solutions—such as target-date funds—ABC [ONE] seeks to offer the potential to enhance returns and improve diversification alongside public market exposures.
“We believe private equity can play a meaningful role in enhancing retirement outcomes over time,” said John Redett, Co-President and Head of Global Private Equity at Carlyle. “Our global private equity platform draws on decades of deep experience investing across cycles, sectors, and regions. By combining expertise with a diversified investment approach, we aim to help investors access opportunities aligned with long-term retirement needs. We’re pleased to collaborate to deliver a thoughtfully designed solution that brings together complementary strengths for DC plans.”
ABC [ONE] will use AB’s proprietary DC technology platform, which today’s release says enables the firm to deliver highly customized default solutions to clients and effectively operationalize them with key business partners such as recordkeepers.
SEE ALSO:
• PGIM Launches Private Credit CIT for Defined Contribution Plans
• Franklin Templeton Adds Private Markets Option to Target-Date Series
• Advisors Foresee Alternatives to Outpace Public Investments
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.