Private Equity Could Be Coming to Your 401(k)

[Helen]

Quote:

Retirement savers in 401(k) plans could soon gain exposure to private-equity strategies, a move that pits proponents of the investment option against critics who say it would introduce unsuitable risks for many investors. The Labor Department earlier this month issued an information letter that opens the door for average retirement savers to invest in strategies that are typically the domain of high-net-worth investors. The letter doesn’t authorize making private-equity investments available for direct investment in defined-contribution plans, such as 401(k)s. But it does appear to sanction their use as an option in a professionally managed multi-asset-class investment vehicle, such as a target-date, target-risk, or balanced fund.

https://www.barrons.com/articles/pri...ow-51592049601

The plan is to tuck these into target funds. Seems like it would have been a good place to unload the mortgage backed securities in 2008.

[Sunset]

Oh how lucky, we will be able to buy all sorts of vague, unclear investments with the sexy name Private Equity

[JustVisitingThisPlanet]

PE funds seem to benefit the fund managers more than the investors. Direct PE is already possible if converting 401K to Rollover to Self-Directed IRA.

[MichaelB]

Quote:

Originally Posted by JustVisitingThisPlanet PE funds seem to benefit the fund managers more than the investors. Direct PE is possible if converting 401K to Rollover to Self-Directed IRA. I've been doing this for several years but am piggy backing off as a smaller player with a group of investors who vet the opportunities. Converted slowly over time and broadly to reduce risk, now across about 20 PE investments/loans.

You’ve posted this same content multiple times and reminded us you “invest in private equity” in almost half your posts. Is there some reason you need to repeat this message so often?

[JustVisitingThisPlanet]

Ah, didn't realize that was an issue. The topic came up so posted again. Have not discussed PE funds before. Will be quiet I suppose.

[MichaelB]

Quote:

Originally Posted by JustVisitingThisPlanet Ah, didn't realize that was an issue. The topic came up so posted again. Have not discussed PE funds before. Will be quiet I suppose.

It’s not an issue when your personal experience adds to the discussion. It is if you’re looking to drum up business.

[JustVisitingThisPlanet]

Ah, I'm not seeking to drum up business. Have no interest doing that and not in that biz. Group I'm engaged in isn't seeking outsiders. Didn't realize it came across that way. Also, I just looked through my posts and only see a few threads where I've discussed PEs, not half of posts.

Removed the repeated part in my first post. Can remove last few if you'd like.

[REWahoo]

Quote:

Originally Posted by JustVisitingThisPlanet Also, I just looked through my posts and only see a few threads where I've discussed PEs, not half of posts.

Interesting. My perception was that you'd mentioned it in virtually every post.

No matter, why not give it a rest and get on with getting on?

[JustVisitingThisPlanet]

Got it, am fairly new to site. Tough to gauge how broadly posts are seen given so many topics/users, but now realize over repeated. Have seen that with new users on forums I've been on for years and now here I am doing it. Feel free to delete last several Michael. Apologies.

[Sunset]

Quote:

Originally Posted by JustVisitingThisPlanet Got it, am fairly new to site. Tough to gauge how broadly posts are seen given so many topics/users, but now realize over repeated. Have seen that with new users on forums I've been on for years and now here I am doing it. Feel free to delete last several Michael. Apologies.

Hey wait...
I was going to ask you about PE.
Seriously I read a little about it, and it seemed pretty negative in that they wanted folks to invest, but you don't have access to the financial reports or perhaps don't even know what the money is going into.

Sometimes I think of PE as a few folks buying a hotel.

Do you get financial reports (audited reports like regular companies Mc'D have to put out) ?

[JustVisitingThisPlanet]

At least annually for direct PE into private companies. Most private companies have up to 120 days (vs 90 for public) to complete audited statements after financial year end. Timing depends on shareholder or bank credit agreements, etc.

Most startups only do an audit when investors demand it, typically with a financing round.