What Insiders Are Really Doing as 401(k)s Get Private Equity Access

The regulatory signal is clear. In August 2025, the administration issued an executive order aiming to expand access to alternative investments, including private equity, real estate, and digital assets, in ERISA-governed retirement accounts. Its purpose was to modernize options for the $8.7 trillion U.S. 401(k) market. Yet, this order is not self-executing. It faces persistent fiduciary liability fears that have long blocked the door.

This is where the real signal begins. The order sets a policy backdrop, but the smart money looks past the headlines to see who is moving their own capital. Longtime advocate Larry Fink of BlackRock has framed private asset investing as a "ladder" for wealth growth. His firm's push is now backed by concrete action, with major recordkeepers like Empower announcing plans to offer these investments in the coming quarters.

The bottom line is that regulatory permission is just the first step. The true test for any investment class is whether those who understand it best-its risks, its complexities, and its potential returns-have skin in the game. When private equity becomes accessible to millions, the insider moves will tell us if this is a genuine opportunity or another overhyped promise.

The Insider's Dilemma: Skin in the Game vs. Public Rhetoric

The regulatory push for private assets is loud. But for the smart money, the real test is what insiders do with their own wallets. The new rules create a classic conflict. On one side, CEOs like Larry Fink advocate for private assets as a "ladder-a way to grow savings, compounding wealth year after year". On the other, the SEC has clarified that insider trading rules apply equally to company stock sold through a 401(k) brokerage window, treating it as an open-market trade. This means any insider selling their shares via that window must follow the same strict Rule 10b5-1(c)(1) requirements as if they were trading on a public exchange.

That creates a clear signal. The classic pump-and-dump setup would be a CEO hyping a private equity fund for their 401(k) plan while simultaneously selling their own stock. The SEC's clarification makes that kind of coordinated manipulation much harder to hide. The key question now is whether these same CEOs are putting their own money on the line. Are they buying private equity with their own capital, or are they simply pushing it for others while protecting their own skin?

The answer will be in the filings. If the rhetoric matches the trades, we'll see institutional accumulation and insider buying in private asset vehicles. If the rhetoric is strong but the trades are absent, it's a red flag. It suggests the push is more about policy influence or fiduciary pressure than genuine conviction. For now, the smart money is watching to see who has skin in the game.

Institutional Accumulation: The Real Smart Money Test

The policy debate is noise. The real test for any investment opportunity is where the capital flows. For private assets to move from niche to mainstream in 401(k)s, the smart money must start buying. That means watching 13F filings for sudden institutional accumulation in private equity firms or funds that stand to benefit from expanded access. It also means tracking whether large pension funds or endowments-those with the deepest pockets and longest time horizons-are finally allocating more to private markets.

The potential whale wallet is massive. As BlackRock's Larry Fink noted, there is about $25 trillion in cash and money market funds that could be tapped for private investment. That's a pool of dry powder that, if even a fraction shifts toward private assets, would provide a powerful tailwind. The question is whether the institutional whales are already moving. Are they quietly building positions in private equity managers or infrastructure funds, positioning themselves ahead of a broader market shift?

Fink frames private assets as a "ladder-a way to grow savings, compounding wealth year after year". For that ladder to be climbed by millions, the early climbers must be visible. Their moves in 13F filings and in direct allocations will be the true signal. If we see large, sustained accumulation, it suggests a genuine conviction that the regulatory overhang is lifting and the returns justify the illiquidity. If the filings remain quiet, it's a red flag that the institutional smart money isn't buying the story-yet.

The bottom line is that policy permission is just the starting gun. The real race begins when the big players start putting their own capital on the line. Watch the filings. The accumulation-or lack thereof-will tell you if this is a genuine opportunity or another overhyped promise.

Catalysts and Risks: What to Watch Next

The regulatory overhang is lifting, but the path forward is fraught with new risks. The real catalysts will be the Department of Labor's next moves. The executive order directs the DOL to revisit its guidance and clarify fiduciary processes. If the agency issues new rules or safe harbors that reduce liability fears, it will be a major green light for plan sponsors. That's the signal the smart money needs to start allocating. The potential whale wallet is enormous-about $25 trillion in cash and money market funds that could be tapped. A reduction in fiduciary risk would make that dry powder a powerful tailwind.

Yet, the flip side is a rising threat: litigation. As the order shifts policy, it may increase the risk of participant lawsuits against plan sponsors who add private equity. The SEC has already clarified that insider trading rules apply to 401(k) trades, but the DOL's guidance could be challenged in court. Plan sponsors, eager to avoid being sued, may demand more stringent due diligence and disclosures. This legal overhang could slow adoption, even as the regulatory door opens.

The bottom line is a race between two forces. On one side, the promise of a $25 trillion market. On the other, the very real risks of fiduciary liability and litigation. The smart money will be watching for the DOL's first moves. If new guidance reduces the overhang, expect institutional accumulation to accelerate. If the legal risks remain high, we'll see more hesitation. The true test is whether the capital flows in or out as the regulatory landscape crystallizes.