Ordinary savers deserve access to private market returns

The American Investment Council released a research report on private equity performance that reinforces a central thesis driving current policy discussions: ordinary savers deserve greater access to private market returns historically reserved for institutional and wealthy investors. Using PitchBook data, the report demonstrates that U.S. private equity has consistently outperformed public markets and other asset classes across multiple time horizons—5, 10, 15, and 20 years—even when accounting for management fees and expenses. AIC President and CEO Will Dunham stated that "the data is clear: private equity provides consistent and reliable long-term returns for investors while safeguarding financial stability for millions of Americans," framing the performance case as justification for broader retail access.

The findings highlight a two-tier performance phenomenon: while standard private equity strategies delivered superior returns, specialist private equity funds focusing on single sectors or industries achieved even stronger long-term performance. This distinction suggests that concentrated, thesis-driven private equity allocations may generate alpha beyond diversified strategies, though the report does not address concentration risk or liquidity constraints associated with sector-specific exposure.

The strategic context underpinning the report centers on 401(k) plan expansion as a primary distribution mechanism for retail private equity access. Policymakers are evaluating regulatory frameworks that would allow defined-contribution plans to incorporate private market vehicles, theoretically enabling millions of individual savers to participate in institutional-quality investments previously unavailable below six or seven-figure minimums. The report frames this democratization as both economically rational—given demonstrated outperformance—and socially beneficial, allowing ordinary savers to build wealth through exposure to the same asset classes that have enriched institutional portfolios.

However, this expansion remains contested within the investment industry and regulatory circles. Critics, including Stanford economist Amit Seru and others evaluating SEC policy direction, argue that opening opaque, illiquid private market assets to retail investors introduces substantial systemic risks and conflicts of interest. The tension reflects a fundamental disagreement: whether superior historical returns justify exposing retail savers to liquidity constraints, valuation opacity, and complexity that institutional investors are equipped to manage. The debate suggests that while the performance case for private equity is data-driven, the access question remains one of risk tolerance, regulatory philosophy, and investor protection standards.