Invesco: DC Plan Participants Interested in Private Markets, but Struggles to Identify Them

Retirement plan participants appear eager to invest in private markets, but many still do not fully understand what they are investing in, according to Invesco Advisers Inc.’s Summer 2026 Defined Contribution Participant Pulse Survey.

Most participants surveyed demonstrated a broad understanding of the implications that come with private market investments. Ninety-three percent agreed that private investments typically involve higher fees and potentially higher returns, and more than half  those respondents (58%) saw the trade-off as a positive one.

Yet even with this broad understanding, when asked to identify which asset types qualified as a private market investment, plan participant respondents scored an average of 3.4 out of 5.

The findings supplemented those from Invesco’s Winter 2026 survey, which found that 86% of participants were either interested in or open to having private market investments included in their workplace retirement plans.

“Our findings show participants are interested in private markets, but education is critical to building comfort,” said Frank Dotro, Invesco’s head of North America institutional and retirement, in a statement.

According to the summer survey, private equity funds (78%) and private lending (71%) were the most correctly identified private assets. However, the findings noted that the word “private” in both labels may have skewed the results.

Only 44% of respondents correctly identified direct real estate, and 41% correctly identified commercial real estate as private assets. Additionally, 28% mistakenly labeled cryptocurrencies as a private market investment.

To help resolve such misconceptions, industry professionals say plan sponsors and advisers can help participants understand private assets and their implications.

“Plan sponsors need to pair thoughtful investment design with clear, practical education to help participants understand the role private markets can play in a retirement portfolio,” said Dotro in a statement.

Asked how they first heard of private markets, the most-cited response from participants was financial advisers. The second-most-common response was the news (48%), while family and friends ranked third (36%).

When participants were asked what would increase their comfort investing in private markets, 43% wanted clearer explanations of risk and return, 28% wanted real-world examples, and 22% wanted performance history.

Additionally, participants appeared receptive to accessing private markets through professionally managed retirement solutions, with 65% expressing interest in a target-date fund with a modest allocation to private markets.

This strategy was also highlighted in a recent event held in New York City by Natixis Investment Managers LLC, an investment management company that provides private market solutions.

“For the participant, … [alternative assets] in DC [plans] are not intended to be stand-alone options in the plan. [They are] intended to be part of a target-date fund [or] part of a managed account, [for example],” Liana Magner, the executive vice president for U.S. retirement and institutional at Natixis, told reporters at the event.

However, experts said at the event that sponsors and advisers should educate participants that embedding private assets can incur higher fees and can make accounts less liquid.

“The liquid nature of those investments can be managed within the construct of that daily valued investment option. For the participant, if the target-date fund they’re invested in has private market holds as a component, the participant still has daily liquidity in and out of the target-date fund,” Magner said. “There are ways to manage that less-liquid nature of the alternative strategy, but you could still have an issue if we had a really large market correction and you didn’t rebalance that private markets account.”

According to Invesco, a provider of private market solutions, embedding private markets into professionally managed solutions has upside for investors.

“The inclusion of private markets in defined contribution plans provides participants with access to investment opportunities that have historically been limited,” said Keith Jones, Invesco’s global head of private markets product, in a statement. “As the industry continues to evolve, thoughtfully integrating private markets into professionally managed solutions can help participants better understand both the opportunities and considerations associated with these investments.”

Invesco’s study was based on an April online survey of 517 DC plan participants conducted in partnership with marketing research firm Ipsos.