The Trump Administration is working on regulations that would allow retirement plan providers to offer ordinary investors exposure to private-equity funds and several 'alternative investments.' It could be a few years before these investment options are available on 401(k) plans, financial experts and advisers are gauging whether the potential for higher returns with private equity in portfolios is worth it.
In general, private-equity firms acquire companies using borrowed money to refine them and sell them later at a profit. This financial model has generated massive gains for many high-net-worth individuals and pension funds in the years after the Global Financial Crisis. However, this investment option remained out of the reach of ordinary investors due to high fees and liquidity constraints.
