New Territory: Private Equity Firms Eye the 401K Market

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Rob Gould, Protiviti Managing Director

On June 3, 2020, the Department of Labor (DOL) issued an Information Letter under the Employee Retirement Income Security Act (ERISA). This Information Letter constitutes new guidance given in response to several employee lawsuits against companies that had included alternative investments in target-date funds. With good reason, private equity (PE) firms are abuzz about the recent Information Letter from the U.S. DOL, which permits PE firms to market PE funds as components of a target date, target risk or balanced funds.

This article discusses the letter and outlines key financial reporting risks PE firms should consider surrounding the new available funds.

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