SIFMA CEO Says Retirees Benefit from Investor Access to Private Markets
Commentary by Steven Lofchie
SIFMA President and CEO Kenneth E. Bentsen, Jr. highlighted the benefits and policy challenges of integrating private market investments into retirement portfolios.
In a Pennsylvania + Wall blog post, Mr. Bentsen summarized policy considerations raised in a SIFMA roundtable focused on allowing individual retirement savers in plans like 401(k)s to access private markets, which have historically been limited to institutional and high-net-worth investors.
Mr. Bentsen emphasized that as more companies remain private longer, policymakers must balance expanded access for retirement savers with strong safeguards and investor protections. He underscored SEC Commissioner Mark Uyeda’s recent remarks that public and private markets are complementary rather than competing. He reiterated that retail investors should have some exposure to alternative assets, with the appropriate level determined by safeguards and investor needs.
Mr. Bentsen said that private assets could strengthen retirement portfolios by enhancing diversification, potential returns, and long-term security. He noted that retirement savers’ long horizons make them well-suited to benefit from illiquidity premiums, while public pensions and international models provide useful precedents. He stressed that expanding retail access must be accompanied by "transparency, [strong] fiduciary safeguards, and investor education" to ensure private assets improve retirement security without introducing undue risks.
On concerns about private market valuation, Mr. Bentsen explained that while these valuations are more judgment-driven, they are far from arbitrary. He said these valuations rely on well-established methodologies such as "discounted cash flow ... market comparables, and precedent transactions." He emphasized that blended approaches, calibration to actual outcomes, and strong governance through independent committees, auditors, and third-party reviews will be critical for ensuring accuracy and investor confidence. He added that transparency, independence, and market discipline further reinforce valuation integrity.
Mr. Bentsen said that with the right protections in place, private assets have the potential to "broaden diversification, democratize access, and improve long-term outcomes for retirement savers."
Commentary
While there are no doubt benefits to allowing at least indirect retail participation in private issuers, there should not be any neglect of the tasks of re-examining the regulations imposed on public companies. One reason why more issuers stay private is that going public costs more than the benefits it provides.