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Private Equity Fees Should Be Top of Mind for 401(k) Managers

June 4, 2020, 8:02 PM

Private equity investments often carry high management fees, so that’s one thing 401(k) managers will need to consider now that the Labor Department has given them the green light to offer such options to plan participants, benefits professionals say.

Private equity funds tend to offer higher returns over the long term—approximately 3% higher per year than publicly traded stocks, according to trade group the American Investment Council—and thus they typically charge flat fees from 2% to 3.5% per year (plus a cut of the profits). Compare this to the 0.3% in annual fees often charged by the myriad mutual funds ...

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