Private Markets Embrace Policy Shifts as 401(k) Access and Regulatory Scrutiny Reshape Industry Dynamics | Weekly Pulse

🚨 Must Know: Trump's 401(k) Executive Order Set to Unleash Private Equity Into Retirement Plans

Bottom Line: The Trump administration is finalizing an executive order that would allow 401(k) retirement plans to invest in private equity, potentially unlocking access to $12.5 trillion in retirement assets for alternative asset managers.

Why It Matters: 📊 This move could be transformational for the private equity industry, which has been lobbying intensively for access to retirement funds. Currently, fewer than one in 10 retirement plans offer any alternative investment options, and only 2.4% make private equity available. The directive would ease legal concerns that have kept these assets out of most worker defined-contribution plans.

Big Picture: 🌍 Alternative asset managers like Blackstone, Apollo, and KKR have reached capacity limits with traditional institutional investors like pension funds and endowments. The 401(k) market represents the next frontier of growth, though critics warn of higher fees and greater risks for retirement plan administrators.

🔍 Industry Insights: Strategy & Outlook

📊 Private Credit Growth Debate: Blue Owl's Craig Packer sees "continued secular shift to private credit" with no plateau, directly contradicting JPMorgan's Jamie Dimon who suggested the market may have peaked

🏆 Performance Focus: CalPERS rises from 17th to top performer among US public pension private equity programs through strategic diversification and co-investment excellence

⚖️ Regulatory Scrutiny: Senator Elizabeth Warren targets $1.7 trillion private credit market, asking Treasury and ratings firms about potential risks to financial system

🔄 Market Evolution: Private credit secondaries deal flow surges from $5-7 billion five years

ago to $36 billion in 2024, with continued acceleration expected

💡 AI Integration: European firms like Hg focus on AI transformation opportunities while maintaining discipline on organic growth over financial engineering

🌐 Democratization Trend: Industry veterans see evergreen fund structures as early-stage revolution enabling mass affluent access to previously exclusive investments

📈 Trends to Watch

🤖 AI Investment Surge: European firms positioning for AI transformation with Eurazeo highlighting Europe's talent pool advantages in artificial intelligence sector

🏟️ Sports Finance Boom: Apollo and Ares expanding sports investing strategies with new fund structures targeting both institutional and individual investors

🔄 Secondary Market Growth: Private credit secondaries experiencing explosive growth as $1.7 trillion market creates unprecedented liquidity demands

📱 Retail Access Expansion: 401(k) integration and evergreen fund structures democratizing private markets access beyond traditional institutional investors

⚡ Higher Leverage Trends: Private credit firms offering increased leverage ratios to compete with syndicated markets, with some deals exceeding 6x earnings

🌍 Geographic Shifts: Middle East VC funding doubling while Asian firms like ShawKwei avoid China due to geopolitical uncertainties

🏦 Bank Re-entry: Traditional banks establishing private credit trading capabilities as they position for potential market share recapture

📊 Continuation Fund Evolution: Private equity continuation vehicles now represent 13% of global exits, up from 5% in 2021, raising quality concerns

🌍 Market Spotlight: Regional Developments

🇺🇸 United States: Goldman Sachs launches new program to retain interns from jumping to private equity firms, offering paths to asset management after two years in investment banking

🇪🇺 Europe: Eurazeo raises €650 million for growth fund focused on AI opportunities, with firm bullish on Europe's talent pool in artificial intelligence sector

🇸🇬 Singapore: Apollo Global Management wins mandate to manage Singapore's $1 billion private credit fund targeting local high-growth enterprises as city-state expands private markets presence

🇦🇺 Australia: Regulator ASIC scrutinizes private credit manager Metrics Credit Partners over loan valuations and governance practices, obtaining over 3,000 documents

🇨🇳 China: Private equity veteran ShawKwei & Partners avoids China investments due to Beijing's tilt toward state-backed firms and unpredictable political climate

🇲🇪 Middle East: VC funding surge with $1.35 billion raised in H1 2025, nearly double the previous six months, led by Saudi Arabia's $245 million in new fund launches

🤝 Deal Spotlight: Transactions & Strategies

🏠 Reckitt-Advent Deal: Advent International acquires Reckitt's homecare business for up to $4.8 billion enterprise value, with Reckitt retaining 30% stake in brands including Air Wick and Cillit Bang

🏃‍♂️ Sports Investment Surge: Apollo and Ares eye bigger roles in sports investing, with Ares launching retail-focused media and entertainment fund allowing quarterly redemptions

💊 Private Credit Expansion: Banks including Bank of America, Barclays, Goldman Sachs, and Morgan Stanley establish trading efforts for private loans as $1.7 trillion market matures

🏢 JPMorgan's Dual Strategy: Despite CEO Jamie Dimon warning private credit may have peaked, JPMorgan allocates $50 billion to compete directly in private lending market

🎯 Co-Investment Growth: Neuberger Berman raises $2.8 billion for fund investing alongside private equity firms, focusing on mid-life deals and minority stake sales

📱 Research Expansion: JPMorgan adds private companies like OpenAI to research coverage, starting with AI and software sectors where private firms shape industry dynamics

💼 Fundraising Focus: Capital Formation

🎯 Neuberger Berman: Closes $2.8 billion NB Strategic Co-Investment Partners V fund, exceeding $2.25 billion target for mid-life transactions

🌍 Pollen Street Capital: Raises €2 billion for Private Equity Fund V, 85% larger than predecessor and including €500 million co-investment capital

📈 Eurazeo Growth: Secures €650 million first close for Growth Fund IV, targeting €1 billion with focus on AI and European tech opportunities

🏦 Coller Capital: Raises $6.8 billion for credit platform Coller Credit Opportunities II Fund in

private market secondaries

🇮🇳 India Focus: ABSL Structured Opportunities Fund Series II completes first close with 7 billion rupees for private debt investing

🇸🇦 Middle East Expansion: Saudi Awwal Bank plans to raise up to 1 billion riyals for first private credit fund focused on MENA region

💰 By The Numbers

📈 $12.5 trillion - Total assets held in 401(k) retirement plans that could gain access to private equity investments

💼 $2.8 billion - Amount raised by Neuberger Berman for new co-investment fund

🌍 €2 billion - Capital raised by Pollen Street for its private equity strategy

📊 $2 billion - Target for Ares' second sports fund for institutional investors

🏦 $1.7 trillion - Current size of the global private credit market

💵 $1.35 billion - VC funding distributed to Middle East companies in H1 2025

🇸🇬 $1 billion - Singapore's Private Credit Growth Fund mandate won by Apollo

📍 €650 million - First close of Eurazeo's Growth Fund IV