Displaying items by tag: private equity

For decades, private equity was the domain of ultra-wealthy investors, endowments, and pensions—but that’s rapidly changing as defined contribution (DC) plans like 401(k)s begin incorporating private market access. 

In a major shift, BlackRock and Empower are launching target-date funds that include private investments, with allocations between 5% and 20%, signaling the democratization of alternative assets for everyday retirement savers. This movement is being fueled by policy, with President Trump’s recent executive order directing agencies to support private equity and other alternatives within DC plans. 

The $12 trillion DC market is a major prize for private equity firms, who are now tailoring products to meet the liquidity and transparency requirements of retirement accounts. While private equity offers higher return potential, experts warn it also carries greater risk and limited transparency, raising concerns about suitability for all investors. 

Finsum: As public markets shrink and private companies stay private longer, including private equity in DC plans may become a necessary evolution in long-term retirement strategy.

KKR and Capital Group have announced plans to launch a hybrid investment fund, Capital Group KKR U.S. Equity+, giving investors access to both private and public equities. Slated for early 2026 pending regulatory approval, the interval fund will allocate 60% to publicly traded stocks and the remainder to private companies, with low investment minimums to increase accessibility. 

As private firms remain off public markets longer, the new fund aims to meet rising demand for diversified exposure and the potential outsized returns from private markets. Interval funds like this offer limited liquidity, allowing redemptions only during set periods, balancing investor access with long-term investing goals. 

The partnership builds on an earlier collaboration between KKR and Capital Group, which launched blended credit funds in April that have already attracted $100 million in assets. 

Finsum: With this new venture, investors can their stake in the growing trend of democratizing alternative investments for a broader investor base.

The Trump administration is preparing an executive order that would allow 401(k) retirement plans to invest in private equity, a move expected to benefit asset managers seeking access to the $12.5 trillion defined-contribution market. The directive, still under discussion, would build on prior efforts during Trump’s first term to integrate private equity into retirement portfolios, previously limited by legal and fiduciary concerns. 

Currently, most 401(k) investments are concentrated in traditional stocks and bonds, as plan administrators have been cautious about incorporating complex and illiquid assets. 

However, critics warn that such a shift could increase fees and risks for savers while exposing plan sponsors to potential lawsuits. The executive order, if signed, would mark a significant change in U.S. retirement policy and potentially reshape how Americans build wealth for retirement.

Finsum: Private equity could offer retirement savers higher long-term returns and a broader array of investment options, particularly as the number of public companies continues to shrink.

A new provision quietly inserted into President Donald Trump’s latest tax bill would give private equity firms expanded tax breaks when they acquire companies and burden them with debt. This language, buried in the One Big Beautiful Bill Act, would increase the allowable deduction on interest payments—effectively subsidizing leveraged buyouts that often result in layoffs, wage cuts, and bankruptcies. 

Despite the provision’s potential to drive billions in tax savings for Wall Street, lawmakers have downplayed its implications, describing it only as an increase in business interest deductibility. 

By altering how interest deductions are calculated—without raising the 30% cap—the bill could hand private equity firms up to a 15% increase in write-offs, according to legal and budget analysts. Over the next decade, this tax tweak is projected to cost the government $200 billion in lost revenue, deepening concerns about corporate accountability and tax fairness.

Finsum: If CNL capital is a well-positioned private equity firm that could be in a good position to benefit to these legal changes. 

Private equity’s long-standing infatuation with oil and gas appears to be cooling. In the first quarter of 2024, only five energy-focused funds reached final close, and notably, none raised over $1 billion—a stark departure from the sector’s 2014 heyday, when fundraising totals topped $78 billion globally. 

Today, traditional hydrocarbons are taking a back seat as investor interest pivots toward renewable energy and broader energy transition strategies. This shift reflects growing pressure from institutional investors and ESG-conscious stakeholders who are increasingly wary of fossil fuel exposure. 

The fundraising gap highlights more than just a cyclical downturn; it signals a structural change in capital priorities. With clean energy rising to the top of the private capital agenda, oil and gas funds may need to reinvent their value proposition—or risk being left behind.

Finsum: CNL Strategic Capital is focused on value creation so this might be a great opportunity to explore the latest trends in PE.