PGIM Brings Private Credit To 401(k) s: DC Plans Get Taste Of Alternative Assets

PGIM, Prudential Financial's (NYSE:PRU) $1.4 trillion investment arm, is breaking new ground for retirement plans. The firm rolled out its first private credit collective investment trust (CIT) for defined contribution retirement plans. The fund will be used within professionally managed retirement solutions, such as target-date and stable-value funds, as well as other multi-manager investment structures. The official name is the PGIM Investment Grade Private Credit Fund of the Prudential Trust Company Alternative Investments Collective Trust. Prudential Trust Company will serve as trustee and manager, while PGIM's multi-sector credit team will act as subadviser. Read Also: HSBC Sits On $4 Billion In Private Credit Dry Powder Amid Sector Turmoil Bridging The Gap Between DC Plans And Private Markets "DC plan sponsors are increasingly looking for ways to diversify beyond traditional fixed income, but the structures available to them haven't always kept pace with the opportunity set," said John Vibert, head of credit at PGIM. PGIM manages $264 billion in private credit assets. It sources deals through a global origination network spanning direct, agented, sponsored and non-sponsored channels. "Private markets have long played an important role in institutional portfolios, but access within DC plans has historically been limited," said Sara Shean, head of Institutional DC at PGIM. "This new collective investment trust reflects PGIM's continued focus on expanding access to private credit through structures that align with the nuanced needs of DC plans while seeking to deliver attractive risk-adjusted outcomes for retirement savers." PGIM subadvises $57 billion in assets across more than 55 CITs on the Prudential Trust Company and Great Gray trustee platforms. The firm said it expects this launch to be the first in a series of private markets offerings tailored for DC plans. The Department of Labor (DOL) has issued a proposed regulation earlier this year that would allow retirement plans to include investments in alternative assets, specifically cryptocurrencies and private markets. “The overarching goal of the proposed regulation is to alleviate certain regulatory burdens and litigation risk that interfere with the ability of American workers to achieve, through their retirement accounts, the competitive returns and asset diversification necessary to secure a dignified and comfortable retirement,” the executive summary reads. The public comment period on the proposed rule ends on June 1. After that, the DOL will incorporate feedback into a final rule, which is expected by late 2026, with phased implementation for plan sponsors beginning next year. Read Also: SpaceX, OpenAI, And Anthropic's Exit Wave Could Trigger A Private Market Repricing Photo: Image via Shutterstock/ simon jhuan