Retirement plans integrate private assets to enhance diversification

Retirement plan fiduciaries are increasingly incorporating private assets to improve long-term outcomes, as firms like Manulife John Hancock Retirement introduce target-date collective investment trusts with up to 20% allocations to private equity, credit, and infrastructure (John Manganaro from The Daily Upside, Alt Goes Mainstream). These collective investment trusts bypass the 15% illiquidity limit imposed on mutual funds by the Investment Company Act of 1940, allowing managers to blend public market exposure with private markets that historically offer differentiated growth and inflation resilience (John Manganaro from The Daily Upside).

Major providers including State Street, BlackRock, and Franklin Templeton are expanding similar strategies, with private market allocations typically ranging between 2% and 20% depending on the investor's proximity to their target retirement date. While the Department of Labor is currently reviewing rules to clarify fiduciary obligations regarding these alternatives, some registered investment advisors, such as Mercer Advisors, have already launched in-house private market fund-of-funds to provide clients with lower-cost access to diversified managers.