Blackstone, the world’s largest alternative asset manager, is launching a new business unit aimed at steering more retirement savings into private market investments. The move could reshape how millions of Americans invest for retirement.
On Oct. 15, the New York-based financial services company announced that it was starting a new “Defined Contribution Unit” that will focus on bringing private equity, real estate, and private credit products into 401(k)-style plans through partnerships with financial institutions and retirement plan providers.
The initiative sits within Blackstone’s private wealth division, which manages about $280 billion in assets.
The news was first reported by The Wall Street Journal. Representatives of Blackstone declined to offer The Epoch Times further commentary about the development.
The move follows up on President Donald Trump’s August executive order directing the Department of Labor and the Securities and Exchange Commission to make it easier for retirement savers to invest in alternative assets such as cryptocurrency, private equity, and real estate.
The policy shift could open a multitrillion-dollar market for private equity firms seeking to reach retail investors through defined contribution plans. The Epoch Times previously reported that the American retirement market is worth as much as $9 trillion.
In a release, the company said Heather von Zuben, formerly head of perpetual capital solutions for Blackstone Credit and Insurance, will lead the new unit. Tom Nides, a former U.S. ambassador to Israel and a longtime Morgan Stanley executive, will serve as chairman. Paul Quinlan, previously chief financial officer for Blackstone’s real estate arm, will oversee the U.S. business.
“For decades, the world’s biggest and most sophisticated institutional investors benefitted from the strong returns and diversification of investing in private markets,” Jon Gray, Blackstone’s president and chief operating officer, said in a statement. “Blackstone is well-positioned to be the partner of choice for retirement solution providers.”
Blackstone, which manages roughly $1.2 trillion in total assets, is part of a broader industry trend. Private markets such as Apollo Global Management and Blue Owl Capital have also launched programs aimed at offering private market exposure to everyday investors through defined contribution plans.
In a research report published by the White House in August, the Council of Economic Advisers said that defined contribution plan participants will “benefit from diversification, higher risk-adjusted returns, and higher retirement income.” Moreover, the U.S. economy should benefit, too.
“We estimate that retail investor access to private equity through defined contribution plans can result in a GDP benefit of up to $35 billion, or 0.12 percent of GDP,” the Council of Economic Advisers report said. “This estimate quantifies the benefit from expanding access to private equity only; there may be an additional benefit from expanding access to other forms of alternative investments such as hedge funds or venture capital.”