United States: 401(k) lawsuit fears threaten U.S. private markets retail push, according to Ocorian research

Managers expect retail demand to surge, but warn legal risk and operational strain could slow the market’s next growth phase.

April 8 2026, United States: Ocorian, a market leader in asset servicing for private markets, today released new research showing that the U.S. private markets industry expects retail participation to rise sharply over the next two years, but fears over 401(k) litigation and the operational burden of serving a broader investor base could hold back growth.

The findings, from Ocorian’s Private Capital Perspectives: The U.S. in 2026 and beyond*, show that 94% of general partners expect retail participation in private markets to increase, as firms push new structures aimed at wealth and retirement channels. However, the same research suggests enthusiasm is being tempered by serious concerns over execution, with 98% saying retail expansion will materially increase operational complexity and cost, and all respondents saying litigation risk for 401(k) fiduciaries could become a significant barrier to adoption.

Vincent Calcagno, Head of U.S. Growth at Ocorian, commented: “There is real momentum behind opening private markets to a wider pool of investors in the U.S., while at the same time the industry is also acknowledging that this brings a very different level of operational, reporting and governance demand. The next phase of growth will not be defined by product innovation alone, but by whether firms can support that access in a way that stands up to fiduciary scrutiny and investor expectations.”

The report shows that managers expect strong growth across the main structures designed to broaden access to private markets. Nearly half (47%) expect a dramatic increase in evergreen or semi-liquid funds, 45% expect the same for business development companies, and half expect a dramatic increase in private market ETFs.

Takeaways include:

• 94% of GPs expect continued growth in retail participation in private markets over the next two years

• 47% expect a dramatic increase in evergreen or semi-liquid funds

• 45% expect a dramatic increase in business development companies

• 50% expect a dramatic increase in private market ETFs

• 98% are concerned that accommodating retail investors will materially increase operational complexity and cost

• 100% believe litigation risk for 401(k) fiduciaries could be a significant barrier, including 55% who say it could be very significant
   

Retail growth expected to accelerate

The research suggests private markets firms are increasingly confident that retail participation will expand in the U.S., supported by investor demand and the rise of structures designed to make private assets more accessible. Managers see this as a structural growth area rather than a niche development, with strong expectations for expansion across evergreen funds, semi-liquid vehicles, BDCs and private market ETFs.

However, the report also shows that firms do not believe this growth will be straightforward.

Operational strain seen as a major obstacle

Almost all firms surveyed said serving retail investors would significantly increase the operational burden on private market managers, including through more frequent NAV calculations, enhanced reporting requirements and the need to manage much larger investor volumes. The findings suggest that, for many firms, the challenge is no longer whether demand exists, but whether their infrastructure can support it.

This creates a clear divide between product ambition and operational reality. As private markets firms look to scale beyond institutional capital, the ability to deliver stronger reporting, governance and investor servicing is becoming a more important competitive differentiator.

401(k) litigation fears could slow retirement market adoption

The sharpest warning in the report concerns retirement channels. All GPs surveyed said the risk of lawsuits against 401(k) fiduciaries could be a significant obstacle to wider private markets adoption, with more than half describing it as a very significant issue.

That finding suggests regulatory change and product development may not, on their own, be enough to unlock mass adoption through retirement markets. Even if appetite grows, fiduciaries may remain cautious if legal exposure, governance expectations and investor suitability concerns are not addressed convincingly.

Retailization story is shifting from access to accountability

Overall, the findings suggest the next chapter of private markets retailization in the U.S. will be shaped less by whether firms want access to new pools of capital and more by whether they can build the infrastructure and controls required to support that access responsibly.

Vincent Calcagno added: “While retail participation may very well become one of the industry’s biggest growth stories over the coming years, if firms want that growth to be durable, they will need operating models that are built for greater transparency, more complex reporting and a much wider investor base. That is where asset managers will increasingly be judged.”

*Ocorian’s Private Capital Perspectives: The U.S. in 2026 and beyond surveyed 248 North American general partners (GPs) and limited partners (LPs) in mid-December 2025, asking for their views on the year ahead and beyond, including macro conditions, investment concerns and industry trends. The GPs were drawn from private equity, private credit, real estate, infrastructure and hedge funds, while LPs included pension funds, wealth managers, insurers and family offices.

The research explores investor sentiment, capital deployment trends, risk management priorities, retailization, compliance and the outlook for private capital markets in 2026 and beyond.

About Ocorian 

Ocorian is a market leader in asset servicing for private markets and a global asset and asset owner service provider, providing a broad range of services across fund services, corporate and trust services, capital markets, and regulatory and compliance support.

Unlocking new value for its clients across jurisdictions and service lines is Ocorian’s priority; it manages over 20,000 structures on behalf of 9,000+ clients including financial institutions, large-scale international organisations, and high-net-worth individuals.

Ocorian provides fully compliant, tailored solutions that are individual to clients’ needs, no matter where in the world they hold financial interests, or however they are structured.

The group offers a full suite of corporate, fund and private client services across a network of offices spanning all the world’s financial hubs. Locations include Bermuda, BVI, Cayman, Denmark, Finland, Germany, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Luxembourg, Mauritius, Netherlands, Norway, Singapore, Sweden, UAE, the UK, and the U.S. 

To find out more about Ocorian and its services, including regulatory information, visit www.ocorian.com