New Law Opens $12.5 Trillion in 401(k) Capital to Fund Managers

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Is your fund missing the biggest regulatory shift in a decade?

On August 7, 2025, President Trump signed the historic Executive Order "Democratizing Access to Alternative Assets for 401(k) Investors," effectively ending the "red light" era for private equity in retirement plans. 

This is not just a policy change; it is the total destruction of the barriers that kept $12.5 trillion in retirement capital locked in "tired" mutual funds. 

For the first time, the door is wide open for private equity, private credit, and real estate to become the new standard in American retirement.

[THE HOST]: Ryan Miller is a fund manager, capital strategist, and former CFO turned angel investor in technology and energy. He is the founder of Fund Raise Capital and Aequor Capital Partners, and has mentored over 1,000 fund managers across private equity, private credit, venture capital, real estate, and alternative assets globally.

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Transcript

Ryan Miller  

Right now, as you watch this video, there are 90 million Americans sitting on a pile of money, roughly 12 and a half trillion dollars, sitting in 401(k) plans. Mostly in mutual funds, mostly in index funds, and mostly in the same tired portfolio that's been offered to workers since 1978. And here's a kicker, the government just kicked open the door for fund managers and their dream. See on August 7, 2025 President Trump signed an executive order democratizing access to alternative assets for 401(k) investors. That's a mouthful, but really, what it means is private equity, private credit, real estate, infrastructure and things that used to be exclusively available to pension funds, endowments and billionaires. They're now being cleared for entry into the biggest pool of retirement capital in the history of the United States of America. And most fund managers, they don't even know this door exists. So today I'm handing you the key, and in the next 30 minutes, I'm going to teach you exactly how alternative fund managers can position themselves to access 401(k) capital, step by step, tool by tool, and move by move. For those of you that stay to the end, I will be providing you with a playbook on how professional asset managers are making this happen right now. Here we go. 

Ryan Miller 

Now, before we go any further, everything I'm sharing today is for educational purposes only. None of this is investment advice, legal advice, tax advice or regulatory advice. The401(k) and ERISA landscapes involve complex legal frameworks that vary by fund structure, investment type and jurisdiction. So before you take a single action from this video, and I want you to take action, you need to work with a qualified legal counsel, ERISA attorneys and compliance professionals who understand your specific situation. What I will tell you is what is possible and how people are doing it. Your advisors will tell you whether and how it applies to you. Let's get started. 

Ryan Miller  

So let me give you the battlefield overview, because if you don't understand why this moment is so significant, you'll underestimate the opportunity, and you'll likely move too slow. I don't want that for you. So here's the numbers that you need to know. Number one, the defined contribution market, that's 401(k)'s, 403 B's and similar plans hold approximately 12 and a half trillion of assets as of the end of 2025. Number two, for decades, the vast majority of these assets have been locked in mutual funds and index funds, zero access to private equity, private credit or to real alternative assets. And number three, institutional allocation models at pension funds and endowments have been putting 20-30% of their capital into alternatives for years. The average 401(k) participant, almost zero. See, that's the gap we're talking about. That's the injustice, and that also, my friends, could be the opportunity. So what's changed? 

Ryan Miller  

Well, in 2020 the Department of Labor under the first Trump administration issued guidance saying plan fiduciaries could not automatically violate ERISA Just by offering investment vehicles with a private equity component, that was a green light. Then in 2021 the Biden administration reversed that course with what's called the supplemental private equity statement. It's essentially telling fiduciaries that they were not likely suited to evaluate private equity. That was the red light that caused a chilling effect across the entire industry. And then on August 7, you guessed it, we moved right back, the red light turned green again but this time they went even further. The Executive Order directs the Department of Labor to issue fiduciary safe harbors, meaning legal protection for plan sponsors who prudently include alternatives. It directs the SEC to review accredited investor rules. And five days later, on August 12, the Department of Labor rescinded the 2021, restrictive guidance entirely. Yep, they put a bullet in it. 

Ryan Miller  

And this isn't a maybe this isn't someday, this is happening right now and already in power retirement, which administers over 1.8 trillion in assets for 19 million investors. It has announced it's offering private investments through 401(k) plans. Can you see why some of us are getting a little excited? So State Street launched a target date series with a 10% exposure to private assets managed by Apollo. And Fidelity launched a CIT based target date fund with private real estate. The big players are already moving. So the question is, will you be ready when the door opens for managers like you? 

Ryan Miller  

Now, let's talk about how this actually works, because here's what most fund managers get wrong. They can think they can just walk up to a 401(k) plan, and say, invest in my fund. Well, my friends, that's not how it works. There are layers to this game. There's infrastructure, there are gatekeepers, and if you understand the architecture, you know exactly where to insert yourself. So let me walk you through the four key players in this ecosystem, just to help you understand exactly some of the processes that these big players do. And if you and your advisors work together and you feel like this is a good move, then perhaps this will help you to review that strategy with it. 

Ryan Miller  

So number one is a planned sponsor, this is the employer Google Ford, a midsize manufacturer in Ohio, doesn't matter. They sponsor the 401(k) plan for their employees. They are bound by ERISA, that's E, R, I S, A to act as a fiduciary, meaning they must act in the best interest of the plan participants. They decide which investments appear on the plans menu, but they almost never pick investments directly. So what does that mean? They rely on player number two, the record keeper. So this is the technology infrastructure of the plan, Fidelity, Vanguard, Empower, T. Rowe Price, Principal. These are the platforms that track every contribution, every trade, every balance, for every plan participant. And here is what is critical to understand, if your fund is not on a record keepers platform, participants literally cannot invest in it. You don't exist to them. This is why record keepers are probably, in my opinion, the most important gatekeepers in this entire ecosystem. And that brings us to the third player, which is the investment vehicle, the CIT. 

Ryan Miller  

Now here's where it gets interesting for fund managers like you. You cannot just drop your alternative fund into a 401(k) plan directly, the fund structure, it just doesn't work. Daily liquidity requirements, ERISA compliance rules, registration issues. It is a total wall. So the solution is something called a collective investment trust or a CIT. So a CIT is a bank maintained pooled investment vehicle. It is available exclusively to qualified retirement plans, 401(k)’s, government plans and regular retail investors; they can't access that directly. But here's why CITs are the golden key for alternative managers. They are not required to register with the SEC, which dramatically reduce compliance costs. They can, however, hold alternative assets and private credit strategies that mutual funds typically can't. So they offer lower fee structures, which plan sponsors absolutely love. And just a little bit of stats for you as of January 2025 CITs now hold, get a load of this. More than $2 trillion in target date fund assets, overtaking mutual funds for the first time ever. So CITs are not a side door. CITs are the front door. They are the main gate. And here's how you get in through what's called the sub advisory model. 

Ryan Miller  

And that brings me to the player number four, the CIT trustee, or the sub advisor relationship. See a CIT it must be maintained by a bank or a trust company. So a fund manager like you, they cannot create a CIT on their own. They need a CIT trustee. So the model works like this. So step one, a bank or a Trust Company acts as the CIT trustee. They hold the legal title. They are ERISA compliant, and they are ERISA fiduciary. And step two, that trustee hires you as the sub advisor. So you provide the investment strategy, the alpha, the expertise, and they provide the ERISA wrapper, the compliance and the platform and the relationships. And then you go to step three, then the CIT gets listed on record keeper platforms like Empower, Fidelity, Vanguard, Principal, and it becomes available to plan sponsors and their participants. See the most prominent example of this model working at scale is Great Gray Trust Company. They're managing over $210 billion in CIT assets as of 2025 and this is the CIT trustee. So then they hire sub advisors, including names like BlackRock, to run everything under strategies. And then, BlackRock estimates that thoughtfully integrating private markets into target date funds could boost 401(k) savings by approximately 15% over 4 years. That is the value proposition you can bring to this ecosystem. The game is real. The infrastructure exists. Now let me show you exactly how to play it like the pros do. 

Ryan Miller

So at this phase, this is where we go from education to execution. And so I'm going to break this down into a starter move and a pro-move, because not every manager is at the same stage, but both of these are actionable, starting today, as long as your team finds it acceptable, and you work with your lawyer and they're they give you the green light. So the starter move is just get ERISA ready and partner up. So if you're an emerging manager or in a fund, say, under 500 million, or someone that has never even thought about 401(k) capital before, this could be your on-ramp. So these are the steps that you could take right now. Step one, conduct an ERISA readiness audit before you can access 401(k) capital. You need to understand if your fund structure is even structure is even compatible or what might need to change. So the key question is, does your fund hold plan assets under ERISA? And this is determined by the 25% rule. So if ERISA covered plans own 25% or more of any class of equity in your fund, your fund is deemed to hold plan assets, and you become an ERISA fiduciary with all the obligations that come with that. Now most funds, private funds, they avoid this by capping a retirement plan ownership below 25%, so this is called the significant participation exemption. So if that sounds right, and your lawyer and your team find that acceptable, then the action here would be to hire an ERISA attorney, not a general corporate attorney, but an ERISA specialist to review your fund documents. See firms like Proskauer Rose, Ropes and Gray, Seyfarth Shaw and Morgan Lewis, they've dedicated their practice to ERISA of practices, and this conversation, it costs you a few hours and maybe a little bit in legal fees, but. It could save you from catastrophic compliance failures down the road.

Ryan Miller 

Hey, thanks for listening to Making Billions, if you liked this episode, could you do me a huge favor and go leave a review? This helps us to get the podcast to more ears, to help people raise capital, learn fund management strategies and serve our mission to help fund managers and deal syndicators to gain greater hope and focus as they build their empire. All right, let's get back to the show.

Ryan Miller   

That brings me to step two, let's understand the CIT trustee ecosystem. So once you kind of have that dialed in, and you have your heading on that, you then need to identify and begin conversations with CIT trustees. So the banks and trust companies that can serve as ERISA wrapper for your strategy, this is where we're starting to play. And so here are the names to start with. All are verified and active in the market. So number one is Great Gray Trust Company. We mentioned them before. So they're based in Charlotte, North Carolina. They're managing about two, 10 billion in CIT assets. They are the largest independent CIT trustee in the market, and they actively work with sub advisors across classes. So you can go to greatgray.com. Number two is Wilmington Trust. It's a subsidiary of M&T Bank, if you know, you know, and a pioneer in CIT structures. And so one of the earliest support to alternative asset strategies that exist within CIT is you can find from here. And so you want to go to wilmingtontrust.com. Number three is SEI Investments, they offer CIT trustee services, and they have deep distribution relationships with other record keepers. So you want to go to seic.com, and so the action item here is you want to go to each of these websites, navigate to their institutional or CIT sections, submit an inquiry, and explain your fund strategy, your AUM, your track record, and just get that conversation started. So you're not pitching them for capital, you're pitching them for partnership. And if you're riding up and moving through trust to the transaction, you want to get into institutions. You know that we got to build relationships, and trust always comes before the transaction. So we want to pitch partnerships more than deals, even though it results in a deal getting funded. As you move into the institution side, the partnership conversation becomes more and more prevalent, comes to the front of the line. So really it's your alpha plus their infrastructure equals 12 and a half trillion dollars. It's bananas. 

Ryan Miller

So step three is, you want to build an ERISA compliant track record narrative, right? So we talk about the 3Rs, if you listen to the show, it's reputation, relationships and your results. So you want to talk about your results, and so you want to dive into what that might mean for the institutions. And institutional plan sponsors, they have a fiduciary duty. They need to justify why your strategy belongs in retirement plan. So they need you to talk about this. You need to give them that narrative. So what does that mean? Well, it really means a three year audited track record, five years is preferable. Risk adjusted return data like sharp ratio, max drawdown, volatility stats, and a clear articulation of how your strategy diversifies a traditional 60/40 portfolio. Then you want to make sure that your documentation is on par and that discloses that your fees are competitive and justified relative to the return. So if you don't have this yet, maybe you start there. Every quarter you delay is a quarter less track record when the big doors start to open. 

Ryan Miller  

Now I mentioned the pro-move, the pro-move here is to navigate the record keeper gatekeepers and secure your distribution. So if you have an institutional grade fund, a multi year track record, and you're serious about accessing this market at scale, this could be your playbook. So step one: map the record keepers landscape. The five largest 401(k) record keepers control the overwhelmingly majority of the DC plan market, that's defined contribution. So here they are by assets under administration. 1. Fidelity Investments, largest DC record keeper. They're administering trillions in assets. Their platform is extraordinarily selective, but offers massive reach if you get in. Then 2. is Vanguards, the second largest, primarily passive strategies, but increasingly open to institutional alternatives with those CIT structures we talked about earlier. Step 3. is Empower Retirement, that's the third largest. They are administering over 1.8 trillion for 19 million investors. And importantly, empower has already announced it is offering private investments through 401(k) plans. They are one of the most active and open platforms for alternative manager conversations right now. 4. is T Rowe Price. They have deep relationships with corporate plan sponsors, especially large employers. And then 5. Principal Financial Group, strong mid market presence. 

Ryan Miller   

So the move here is that you could do, as long as it's cleared with your legal team, is download and study each record keepers, DCIO, or Defined Contribution Investment Only, and those manager guidelines that come with it. So most publish that publicly. So this tells you exactly what they require before putting their fund on the platform. Then you go to step two. You want to approach Empower first and here's why I think this is the right move. Empower is the move right now, they have publicly committed to offering private equity, private credit and private real estate through 401(k) plans. They have announced the structure CIT has provided limited exposure to diversified pools of private assets, so they're actively looking for sub advisors to fill that pipeline. All right, you want to feed a starving market, perhaps this is a good place to start. 

Ryan Miller  

So here's how, if I was in your position, here's how I would approach them. So first you just go to empower.com navigate to their advisor and institutional section. Find their DCIO partnerships page and request a meeting with their investment platform team. It's not sales, it's an investment platform. So your pitch deck for this meeting needs your investment strategy in plain language, your three to five year track record with risk metrics and clear liquidity management framework. So you want to show how your strategy can operate within a daily priced CIT wrapper. This making sense so far, and your fee structure needs to be in there as well. And it has to have a comparative analysis against mutual fund alternatives and just show how you are in line with your fees. Then, step three, pursue the target date fund sub advisor slot. So this is the highest value, highest volume distribution channel in the entire 401(k) distribution ecosystem. So target date funds now hold over $5 trillion of assets as of 2025 and target date just means, hey, I'm in invest over my career. I want to retire in 37 and a half years. I'm just making this up. And so they set a target date, and it tends to actually operate naturally as your career progresses and you get closer, it starts to help you with that. So that's a little bit of those requirements. And they are the default investment option in most 401(k) plans, when a new employee enrolls and picks nothing, their money goes to a target date fund. 

Ryan Miller  

So the emerging model is what's called co-manufacturing, where a CIT trustee, like Great Gray Partners with a sub advisor, they work together to create a custom target date series which is then distributed exclusively through a specific record keeper, like Empower that we just talked about. So what does that mean, well, the translation is, if you secure a sub advisor slot in a co manufactured target date series distributed through Empower, you now have access to millions of retirement plan participants without ever talking to a single plan sponsor. 

Ryan Miller   

So how do you pursue this, well, here's how many people do it. Step one, contact Great Great Trust Companies business. You contact their, specifically their business development team, and you explain that you're an alternative manager interest in sub advisory discussions for CIT structures. Then step two is you want to prepare a 15 minute investment overview deck, specific on how your strategy fits within a target date glide path. Meaning which vintage years does your strategy serve, and how does your return and risk profile complement the equity and fixed income allocations. And step three is, understand the liquidity solution. The number one concern in this ecosystem is daily pricing. Your strategy likely does not have daily liquidity. The solution is an alternatives sleeve so your fund sits inside of a larger CIT that has significant liquid investments to handle daily redemptions while maintaining your illiquid exposure. That sounds kind of nice, so you need to be able to articulate that clearly. Then step four is you engage in ERISA of consultants and DC plan advisors. 

Ryan Miller  

There is an entire ecosystem of investment consultants who advise plan sponsors on investment selection. These are your sales people, except they're fiduciaries themselves. See key firms to know, and ones that you may want to approach are number one CAL & Associates, one of the oldest, most respected DC Investment Consultants. NEPC, that's the second one, major institutional consultants with significant defined contribution, plan business. The third one is Mercer Investment Consulting, it's a global firm advising plan sponsors around the world. And then the big boy, Aon Hewitt Investment Consulting, it's also a major player in the large plan market. So the action here is find the DC practice leaders at each of these firms, just do it on LinkedIn. And then you can reach out with a simple direct message, something like, for example, hey, I manage a strategy with a multi year track record. I'm exploring sub advisory relationships within the CIT structures for DC plan integration. Would you welcome a 20 minute conversation? So do not pitch, just request intelligence. Ask them what plan sponsors are looking for. Ask them what gaps exist in the current alternative options that are available to their clients. Just listen, and then you come back with a solution. And that takes you to step five, which is build for compliance now, not later. 

Ryan Miller  

This is where emerging managers get absolutely creamed. They get interested parties, they get momentum, then due diligence kills the deal because their compliance infrastructure is amateur hour. So minimum requirements for DC plan consideration to think about is number one, annual audited financial statements from a recognized audit firm. Number two is a dedicated compliance officer or documented compliance program, so a Form ADV that may help you to address the ERISA considerations, and a DDQ, Due Diligence Questionnaire or Due Diligence Questionnaire. So if you have your DDQ in those documents, pre completed and ready to send on request now, you're in a great position. And a lot of the times, standard formats are already published by people, so you don't have to. Invent the wheel, unless you really want to, or your lawyer tells you to. But if you're just looking for a standard format, just to try it out and to test it, you can look at places like ILPA, that's the Institutional Limited Partners Association. And you also want to have a clear valuation policy for your illiquid assets. So plan sponsors. They need to understand how you value your holdings so you can start building those now, not when the conversation gets serious, but now. And if you've seen the DDQ, which I have, it's very substantial, and it might take you a while, and you definitely don't want to do it without a lawyer, because when a $500 million plan sponsors consultant calls you, you have 48 hours to send a DDQ or you're out of the deal. 

Ryan Miller  

That brings me to the next section. It's your call to action. Now I want you to listen to me. The window between a regulation changes and when the market adapts is the most valuable window of all finance, we established that early on. So right now you are watching this in that window. The executive order is signed. The Department of Labor guidance has been rescinded. Empower is moving. Great Gray is moving. BlackRock is moving. The 12 and a half trillion dollars is starting to open up to alternative asset managers. Most fund managers will read about this, maybe in 18 months, when it's already crowded, but you are finding out today. 

Ryan Miller   

So here's what I need you to do right now. In the description below, you can click on the link and download a free guide that I built for this episode. It's called The 401(k) Access Roadmap For Alternative Fund Managers. That's a long mouth for something free. But inside that guide, I've given you just examples, and you can find things like the complete starter move and pro move broken down into clear, actionable steps. The names of websites of every CIT trustee record keeper and ERISA consultant I mentioned today a DDQ readiness checklist, so you know exactly what due diligence materials to prepare a compliance readiness checklist before your first institutional conversation and key questions to ask your ERISA attorney on the first meeting. You can print it, work it, use it as your battle plan before you consult your advisors and deploy. But I want to be very clear with you, everything in this guide is educational. The space requires licensed legal and compliance professionals working right beside you, so the guide 401 points you in the right direction, but your advisors will help you to walk through the door, and they may do it with you. 

Ryan Miller  

So if this video helped you, then I'd love for you to hit that like and subscribe button leave us a review, because every week I come here and we break down some of the highest levels of institutional finance, not for the people who already know, but for the people who are ready to know, you're that person otherwise you wouldn't be here at the 30 minute mark. 

Ryan Miller  

So let me leave you with three things I want you to walk away with today. Number one, the door is open right now. The executive order is signed. The Department of Labor Guidance that was choking this market for four years has been rescinded, and the regulatory environment has shifted in your favor. The window is open, but it will not stay open forever. Number two, the CIT, that is your vehicle you cannot access 401(k) capital directly, you need a CIT trustee. So we mentioned Great Gray, Wilmington Trust, SEI to wrap your strategy in an ERISA compliant structure. That partnership is your on ramp. So you start those conversations when you're ready, and the number three compliance is not a checkbox. It's your competitive advantage. The managers who win in the space will be the ones who showed up ready, audited track records ERISA of council engaged, DDQ, pre-loaded. So when the $500 million plan sponsor consultants call you when you have those 48 hours. You are ready before that phone even rings. You do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller 

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.