BlackRock Wants 5% to 20% of Your Target-Date Fund in Private Assets
2026-09-04 08:30
•James Brumley •The Motley Fool
•••• •••••••••• Axe Cap view
Private Assets Make a Quiet Entry into Retirement Funds
BlackRock is adding private investments to target-date funds, aiming for better diversification and returns.
BlackRock’s move to place 5-20% of target-date fund assets in private investments is a subtle but significant shift. In the US, this opens 401(k) participants to private equity and debt, usually locked away for institutional players. For South African investors, the direct impact is limited, but the broader message matters. The JSE is plagued by concentration in giants like Naspers and Prosus, with limited alternative exposure. Private assets can mean less volatility and smoother returns over time. But they’re also less liquid and harder to value, which raises questions about how suitable they really are for retail investors. Rand investors should watch the USD/ZAR closely. A stronger dollar might benefit foreign-based private assets denominated in dollars, but it can also pressure local markets if risk appetite fades. Given how cautious many remain on local equities, private exposure is a tempting way to diversify, but one I’d advise monitoring rather than rushing into. The risk? Poor liquidity or valuation shocks if markets turn. this is just our opinion and not financial advice
I’d watch the private equity segment via listed alternatives selectively, maybe adding small exposure to Prosus or Naspers where valuation and currency are favorable, but mostly stick with high-quality banks like Standard Bank or FirstRand for steadier exposure.
- USD/ZAR
- Prosus
- Illiquidity in private assets
- Volatility in USD/ZAR affecting returns
6/10
BlackRock is launching target-date mutual funds through Great Gray Trust that will allocate 5-20% of assets to private investments, offering 401(k) plan participants exposure to privately held businesses. The move aims to provide better diversification and potentially higher returns (about 50 basis points annually more than stocks) as the stock market becomes increasingly concentrated in large-cap and technology stocks.
Our take is based on reporting first published by The Motley Fool.
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