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Asset managers seek to bring alternatives to DC plans via CITs and interval funds, Cerulli finds
Research - OCTOBER 15, 2024

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Asset managers seek to bring alternatives to DC plans via CITs and interval funds, Cerulli finds

by Released

Although adoption of alternative investments in defined contribution (DC) plans continues to be limited, new Cerulli research finds asset managers are seeking to make inroads via collective investment trust (CIT) and interval fund structures.

According to The Cerulli Report — U.S. Defined Contribution 2024, about one-quarter of asset managers report they currently offer each, and 17 percent and 25 percent, respectively, report they are considering offering these structures to DC plans in the next two years.

Cost, liquidity and plan sponsor inertia have hindered adoption of alternative investments in the DC channel. Alternative investments are typically more expensive and can include performance fees and other embedded operational costs. Moreover, alternative investments often involve long lockup periods — a sort of illiquidity in direct conflict with DC plans, where it is expected for participants to be able to change their investment allocation without li

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