We explore the potential impact of including private equity in a multi-asset solution.

The private equity asset class has long been recognized for its appealing risk/return characteristics. However, inclusion in defined contribution plans has often been limited by structural considerations, including regulation, liquidity and other factors. As product innovations reduce such barriers, however, we believe it’s time for DC plan sponsors to take a fresh look at the asset class. In this white paper, we present a hypothetical study to illustrate the potential impact of including private equity in a multi-asset solution, both on asset accumulation and income generation at retirement. In this case we used a target date fund, but the outcome is relevant to other retirement multi-asset solutions such as target risk funds and managed accounts.

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