02.16.26

How Will Private Markets Exposure Impact Fiduciaries?

by: James Van Bramer

As private market assets gain traction in defined contribution plans, fiduciaries are facing increased scrutiny around how these investments are implemented and monitored rather than whether they are permitted. A recent analysis from Pallas Capital Advisors notes that while private equity and private credit have long been allowable in 401(k) plans, their growing inclusion within target-date funds, balanced funds and managed accounts has expanded the scope of fiduciary responsibility. Experts say fiduciaries must demonstrate disciplined processes related to liquidity management, valuation governance, fee transparency and operational coordination, particularly as regulatory guidance from the Department of Labor is expected to clarify expectations. While the legal standard of prudence has not changed, advisors caution that discretionary investment managers may bear greater responsibility as plan sponsors increasingly rely on their expertise when evaluating complex private assets.

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