Empower unveils Blackstone as latest private-market investment partner

Empower is adding Blackstone to its roster of private markets partners, widening the menu of alternative investments available to workers saving in defined contribution plans such as 401(k)s.

The retirement and wealth provider said Wednesday that Blackstone has joined its private markets investment partnership program, which packages private equity, private credit, infrastructure and real estate strategies in collective investment trusts. The vehicles are meant to give retirement savers exposure to asset classes that have historically been the domain of institutions and high-net-worth clients.

“Our goal is to bring the power of private market investing – delivered through advice and risk-appropriate structures – to millions of Americans who previously lacked access,” said Edmund F. Murphy III, president and CEO of Empower. “Blackstone’s involvement significantly bolsters the opportunities available to retirement savers.”

Empower began rolling out its private markets initiative in May last year, teaming up with managers including Apollo, Goldman Sachs, Franklin Templeton, Neuberger Berman, PIMCO, Partners Group, and Sagard to build CIT-based options aimed at portfolio diversification. It only allows access through its managed account platform, which uses an advice-based model to set allocations according to each participant’s risk profile, time horizon, and savings goals.

The Blackstone deal adds more scale to that effort. The firm, which manages more than $1.2 trillion in assets, has been active in individual private markets solutions since 2002 and has built a dedicated retirement-focused business unit. Empower framed the partnership as part of a broader push to give 401(k) participants access to “institutional-caliber” strategies without leaving the protections of a workplace plan.

“Partnering with Empower reflects our shared belief that private markets can play an important role in helping more Americans plan for the future and build long-term financial security,” said Blackstone president and chief operating officer Jon Gray. “Bringing Blackstone’s leading investment strategies into defined contribution plans enables retirement savers to access the same opportunities previously only available to institutional investors.”

The move lands as advisor interest in private markets inside retirement plans appears to be building. In a July survey of advisors by Empower, 68% said they already use private assets such as private equity, real estate and credit, largely in high-net-worth and wealth-advised accounts. Among advisors familiar with private markets, 58% said they would recommend them in defined contribution plans, a figure that rose to 75% for those who also work with pensions or other defined benefit plans. More than four in ten of all respondents said they would recommend private market exposure.

More recent research from Morningstar suggests that semiliquid private market funds can provide incremental benefits in retirement plans, though not dramatic ones.

Its analysis of more than two hundred sixty-five thousand 401(k) participants found that adding semiliquid private equity and private credit funds inside CIT structures modestly improved success ratios — defined as sustainable retirement income relative to a 70% of final salary goal — across participant cohorts. The study capped semiliquid exposure at 15% of assets and reported no scenarios in which outcomes were worse than a traditional portfolio.

“It’s important to keep in mind that our cohorts are only saving a bit more than the company match," the analysts at Morningstar said. "Small increases in savings could have significant impact on outcomes.”