They opened 401(k)s to private equity a year ago. Here’s what actually happened.

Almost exactly a year ago, in August of 2025, an executive order landed that changed the rules for what your 401(k) is allowed to hold.

The short version: retirement plans in the United States can now include private equity, private credit, real estate, and even digital assets in their menus. The order was called Democratizing Access to Alternative Assets for 401(k) Investors, and it kicked off a regulatory rewrite at the Department of Labor that’s been rolling out ever since.

If you’d been on our Mastermind calls over the last couple years, you would have seen this coming.

Everything I’ve been talking about… the shift from public to private markets, the family office paradigm, the way the ultra-wealthy actually allocate their capital… all of it points toward this exact policy shift.

But now that we’re a year in, I want to give you my honest take. Because I think the reaction to this order is going to matter a lot more than the order itself.

What the Order Actually Does

Before the order, 401(k) fiduciaries operated under guidance that essentially discouraged them from adding alternatives. The 2021 supplement from the previous administration was clear that most plan fiduciaries lacked the experience to properly evaluate things like private equity.

The August 2025 order rescinded that. It directed the Department of Labor to reexamine its guidance, and in September of that year the DOL issued advisory opinions clarifying that alternatives can be part of a qualified default investment lineup.

That’s the technical piece. 

The practical piece is bigger: It means that over the next few years, trillions of dollars of retirement capital that used to sit exclusively in stocks and bonds are going to start flowing into private markets.

The Validation

I want to be honest. When I first read the order, part of me felt validated. I’ve spent a long time writing and speaking about the fact that the wealthiest families in the world have most of their capital in alternatives. That the stock market is the alternative for family offices, not the other way around. That private credit and private equity and direct real estate ownership are where the real wealth is being built.

The order essentially says the same thing at a policy level. Every American should have access to the asset classes the ultra-wealthy have been using for generations.

If you’re a reader of this newsletter, that argument is not new to you. The federal government just made it official.

The Warning

When a good asset class becomes broadly accessible, quality dilutes. The reason private deals have historically outperformed public markets isn’t just the illiquidity premium. It’s the selectivity. It’s the fact that the best sponsors don’t need to market to strangers, because they can fill a raise from their existing investors in a few phone calls.

When you open the gates and let a wall of 401(k) capital flow in, that dynamic changes. The best sponsors are still going to fill from their existing relationships. What ends up on the retirement plan menu is going to be, in a lot of cases, the deals the top-tier sponsors couldn’t fill through their normal channels.

That’s not a conspiracy. That’s just how capital markets work. Institutional capital gets first look. Then relationship capital. Then retail capital. If you’re in the third bucket, you’re getting what the first two buckets didn’t want.

I’m not saying every alternative that shows up in a 401(k) menu is going to be bad. Some plan sponsors are going to do this well. Some are going to partner with real operators and give participants genuine access to real deals.

But if the average retail investor’s first exposure to private markets is a “private equity” line item on their retirement account, curated by an HR benefits committee, they’re going to have a very different experience than the people who have spent years building relationships in this world.

What This Means for You

If you’re reading this newsletter, you’re probably not the average 401(k) participant. You have real capital, real experience, and you’re already thinking about how to build a portfolio outside the public markets.

The 401(k) order is still relevant to you for two reasons.

First, it validates the direction you were already moving. The rest of the market is now moving toward what you’ve been doing. Which means the tailwinds behind private markets, private credit, direct real estate, and everything else in the alternatives category are going to get stronger. The capital coming in is going to lift good deals and bad deals alike.

Second, it means the discipline of how you access these markets matters more, not less. When everyone starts calling themselves an alternatives investor, being an actual alternatives investor… one with real due diligence, real deal flow, real relationships… becomes more valuable, not less.

The order is a permission slip for a wall of capital. It’s not a filter.

You still have to be your own filter. Or you have to be in a room with people whose job is to filter for you.

The Longer View

I’ll be honest. I don’t know exactly how this plays out. My best guess is that in five years we’ll see two very different outcomes for retail investors in alternatives. Some will do fine, because they got exposure through well-structured funds curated by disciplined plan sponsors. Others will end up as cautionary tales, because they got sold the leftovers of a hot market by intermediaries collecting fees.

The people who understand how private markets actually work will be fine either way. The people who assume the label on the box is the same as what’s in it are going to learn an expensive lesson.

That’s the piece I wanted to write about. Not the policy. The reader response to the policy.

Until next week,

Justin