WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with Better Markets’ new Fact Sheet entitled “Now is Not the Time to Expose 401(k) Plans to Private Credit”:

“Investors in private credit funds can’t get out fast enough, as skepticism about the fairness and accuracy of their valuations has spooked the market. Yet the Department of Labor (DOL) wants to facilitate the inclusion of alternative assets like private credit funds in millions of Americans’ 401(k) plans. This is exactly the wrong approach at the wrong time.

“Investors who are already in private credit want to get out so badly that some of the biggest names in private credit have been forced to enforce a 5% limit on redemption requests:

• BlackRock capped redemptions at 5% after investors sought to redeem 9.3% of their shares
• Apollo Global Management capped redemptions in one of its largest private credit funds at 5%, even though clients sought to redeem 11.2% of their invested capital.
• Ares capped redemptions at 5% after receiving redemption requests of about 11.6%.
• Carlye Group received redemption requests of 15.7% but capped redemptions at 5%, meaning investors received only $240 million of the $750 million they requested.
• Blue Owl capped redemptions at 5% in two of its private credit funds after investors sought to pull out $5.4 billion—22% of one fund and 41% of a second fund.

“With so many investors essentially trapped in private credit funds from which they cannot escape, it would be an understatement to say that this seems like a terrible time to expose retail investors to private credit. Nonetheless, the DOL has decided that now is the time to try to induce plan sponsors to include private credit in the 401(k)s of millions of American investors. There could hardly be a proposal more dangerous to Americans’ retirement security. Investors already in private credit are currently running for the exits. DOL’s proposal means that one day millions of Americans with 401(k)s may have to do the same.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.