As the industry awaits official guidance from the Department of Labor (DOL), new research finds that employers are increasingly showing interest in alternative investments.
Recent findings from Escalent’s 2026 Retirement Planscape report shows that 44% of defined contribution (DC) plan sponsors are interested in learning more about how to incorporate private market investments into 401(k) portfolios.
This enthusiasm was especially pronounced among large and media firms, who showed the highest levels of intrigue at 62% and 50%, respectively. Employers interested in the products were most receptive to private credit (75%), private equity (75%), private infrastructure (73%) and venture capital (72%), with private real estate (61%) ranking the lowest out of all categories.
Plan sponsors said they were drawn to the investment’s lower fees (35%) and diversification/managing downside risk (33%). The leading motivator for midsize plans was inflation hedge/inflation protection, while large plans gravitated toward the asset’s increasing diversification/managing risk and mega plans liked the greater emphasis on increased liquidity.
Much of the attention could be attributed to recent government attention. The retirement industry is still awaiting official regulation from the DOL, following a 60-day comment period that drew nearly 45,000 comments from organizations and advisors.
President Donald Trump had previously signed an executive order that directed federal agencies, including the DOL, to rework past guidance on private investments in DC plans.
“New regulations from the US Department of Labor have given alternatives a major boost,” said Sonia Davis, lead report author and senior product director in Escalent’s Cogent Syndicated division. “Plan sponsors now have greater flexibility in deciding which asset classes are advantageous to their plans, and that’s led to an influx of interest in alternatives. The industry is still in the early exploratory phases with most sponsors mulling which types of alternative investment options could fit best within their lineups. As such, recordkeepers and DC investment managers will need to lean heavily into education to translate sponsor curiosity into smart adoption.”
The broadened accessibility hasn’t influenced all plan sponsors to incorporate the investment. Among those disinterested in the product, 49% of large plans said weak participant demand refrained them from further interest.
Further, some sponsors ranked high fees and expenses as their largest barrier to adding the funds to portfolios.
Despite the slight skepticism from plan sponsors, findings show at least a degree of interest among participants. A survey by The Wall Street Journal, conducted via the Harris Poll, found that while nearly 40% of respondents said they never heard of private credit funds, 59% reported a general interest in investing in the funds. Another 90% admitted they would allocate a portion of retirement savings to private investments.
Escalent’s study surveyed over 1,000 401(k) plan sponsors and benchmarked the top DC plan sponsors and DC investment managers on brand equity and experience.