About a month after BlackRock CEO Larry Fink called for making alternative investments including private equity available to 401(k) plans in his annual letter to shareholders, T. Rowe Price Chair, CEO and President Rob Sharps says it’s only a matter of time until private market alternatives gain access to defined contribution plans—and if research indicates it would result in better outcomes for DC plan participants, the company will offer it.
During T. Rowe Price’s first-quarter earnings call on May 2, Sharps said the asset manager is “examining how allocations to private market alternative investments could add to our target date franchise—so we are ready, if or when plan sponsor demand materializes.”
Asked about the potential for alternative investments to gain access to the U.S. retirement channel during the Q&A session of the call, Sharps doubled down.
“In my mind, there’s no question that eventually, it will happen. I think you can debate timing and magnitude, but at some point, and to some degree, defined contribution, more traditional high net worth and mass affluent will get access to private market alternatives,” Sharps said.
Regarding retirement specifically, Sharps added that being a retirement solutions provider is one of the great strengths of the firm. “If you look at how we’ve evolved our retirement dates, we’re constantly evaluating ways to improve our range of offerings and innovating our product design,” going on to mention Personalized Retirement Manager, a model account which offers a customized glide path, and Managed Lifetime Income, which allows participants to guarantee a portion of their income.
“…If our market research and our investment research shows that incorporating private market alternative into DC offerings results in visibly better outcomes for 401(k) plans and participants, we’ll offer that.”
Rob Sharps
“So, as a solutions provider, if our market research and our investment research shows that incorporating private market alternative into DC offerings results in visibly better outcomes for 401(k) plans and participants, we’ll offer that,” Sharps said.
As Pitchbook pointed out in an article Monday, a loose coalition of alternative-asset firms, broker-dealers, mutual fund platforms and financial advisors envision a future in which 401(k) accounts and other employer-sponsored retirement plans offer private-market investment products alongside standard public market mutual funds.
Advocates for the public-private retirement savings model are enlisting help from lawmakers and other government officials to speed the expansion of private equity into DC plans, and with Republicans in control of Washington, many industry advocates sense the stars are aligning.
In his annual letter to shareholders released on March 31, BlackRock’s Fink emphasized the importance of expanding access to private markets—such as private equity, credit, and infrastructure—for everyday investors, including those saving in 401(k) plans.
By democratizing access to private markets, Fink wrote he believes more investors can participate in economic growth and enhance their retirement outcomes.
While opponents argue that that many 401(k) participants lack the financial sophistication of institutional investors and could be exposed to higher fees and risks they don’t fully understand—such as a lack of daily liquidity with private assets—proponents point to the long-term horizons of retirement investors and that private assets typically deliver higher returns over time.
A 2023 report from Georgetown University’s Center for Retirement Initiatives claimed U.S. DC plans are missing out on potential returns of $35 billion a year by not incorporating private equity and real estate investments like defined benefit plans do.
Studies (such as those by Cambridge Associates and PitchBook) often show private equity generating 3-5% higher annual returns than public stocks over rolling 10- and 20-year periods. This illiquidity premium compensates investors for tying up capital for long periods.
“At a very high level, I think it does make sense that 401(k) participants and retirement investors would trade liquidity for return given the very long-time horizons that retirement investors have,” Sharps said Friday.
But he was quick to add that the firm’s engagement with plan sponsors would suggest that they’re taking a go-slow approach. “I think there’s concern about fiduciary risk, there’s concern about liquidity, there’s concern about early pricing, and there’s concern about fees,” Sharps said. “I’m confident that we can address those in time. But whatever we do, it will be based on investment research—our conviction that it will result in a better risk/reward profile for the underlying portfolios that we offer and that we’ll be able to solve through these challenges.”
Baltimore-based T. Rowe Price serves millions of clients globally and manages $1.57 trillion in assets under management as of March 31, 2025. About two-thirds of the AUM are retirement-related.
ICI’s Pan: Idea has White House’s attention
T. Rowe Price’s Sharp wasn’t the only high-profile leader talking about providing retirement investors with access to private markets lately.
Investment Company Institute President and CEO Eric J. Pan said Monday in a Bloomberg Television interview that the idea—one of ICI’s strategic priorities—is “definitely” grabbing interest from the White House. “This is one of the goals that we think should happen: allowing Americans through their retirement accounts to have access to private assets,” Pan said on “Balance of Power: Late Edition.”
Pan said he sees “a lot of support for the idea” across the regulatory landscape in the Trump administration. “As to how to make it happen, there remains a lot of work that needs to be done. Department of Labor, Securities and Exchange Commission, the White House—they all have to be part of the conversation,” Pan said.
He added that there are several steps to clear in order to give retail investors access to private markets. “In reality, we have laws that need to be passed, regulations that need to be made,” Pan said. “But what I can tell you is people are talking about it today. They’re working hard on the issues today. So I’m very optimistic.”
EDITOR’S NOTE: This article has been edited since initial publication to include remarks from ICI’s Eric Pan.
SEE ALSO:
• BlackRock’s Fink: Democratize Investing by Expanding Access to Private Markets
• 401(k)s Miss Out on Billions by Not Adding Private Equity, Study Finds
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.