AllianceBernstein (AB), Brookfield Asset Management and Carlyle have unveiled a turnkey private markets solution for defined contribution (DC) plans, to give retirement savers an allocation to the asset class that adjusts with age.
The new solution, ABC [ONE], is designed to be implemented alongside an existing target-date fund or managed account solution, and is intended as a single source of private markets exposure for a DC plan’s qualified default investment alternative (QDIA).
Read more: AllianceBernstein sees growing investor appetite for alternatives
It will “dynamically adjust” allocations to private credit, private real assets and private equity, depending on an individual’s age.
AB, which oversees $105bn (£78.3bn) in assets in custom target-date solutions, will manage the allocation to the three private market asset components, alongside the plan’s existing QDIA, based on participants’ ages and preferences.
$1tn global alternatives investor Brookfield will manage the private real assets component, while global investment firm Carlyle, with $475bn in assets under management, will manage the private equity element, and AB will be responsible for managing the private credit part.
ABC [ONE] will use AB’s proprietary DC technology platform, which enables the delivery of customised default solutions to clients.
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“For more than a decade, AB has been incorporating private assets in custom target-date funds, in both the US and the UK,” said Onur Erzan, president of AllianceBernstein. “Based on our investment research and hands-on experience, we believe that when a plan decides to include them, it’s critical to optimise the deployment of these assets for DC participants.”
“With more than 125 years of experience owning, operating and investing in the infrastructure, energy and real estate assets that underpin the global economy, we believe private real assets offer compelling diversification benefits and differentiated return drivers that can support more stable, resilient long-term outcomes for DC participants,” added Connor Teskey, chief executive of Brookfield Asset Management.
John Redett, co-president and head of global private equity at Carlyle, said: “We’re pleased to collaborate to deliver a thoughtfully designed solution that brings together complementary strengths for DC plans.”
Last year, US President Donald Trump signed an executive order allowing private credit and other alternative assets to be included in 401(k) retirement plans. In March this year, the US Department of Labor proposed a new rule laying out how 401(k) plan providers should select alternative investments, such as private credit.
