Principal Financial Group expands 401(k) access to private markets

Principal Financial Group is expanding its US retirement plan business to include private markets. The provider intends to launch collective investment trusts (CITs) that combine public and private strategies, collaborating with asset managers such as Blackstone, Ares, KKR, and Partners Group.

This expansion follows an executive order aimed at opening 401(k) accounts to alternative investments. Principal stated that private markets are becoming a significant part of retirement discussions but require specific oversight and operational discipline. The firm’s Featured Partner Programme will support these strategies as components within professionally managed investment products.

Concurrently, the Department of Labor has proposed rules to facilitate access to alternative investments like private equity, real estate, and cryptocurrency within 401(k) plans. These proposed changes aim to “democratize access to alternative investments” while also seeking to “lower litigation risks” for employers by providing them with more legal protection regarding how they oversee retirement plans.