Understanding the 401(k) Market – Eric Mogelof, KKR (EP.464)

In this episode of Capital Allocators, host Ted Seides interviews Eric Mogelof, Head of Global Client Solutions at KKR, about the potential for private market allocations within retirement plans, particularly defined contribution (DC) plans. They discuss the current landscape of retirement assets, breaking it down into defined benefit (DB), defined contribution (DC), and IRA markets. Eric explains the challenges and opportunities in incorporating alternatives into DC plans, focusing on the decision-making processes of plan sponsors and the structural issues related to liquidity and daily pricing. He differentiates between off-the-shelf target date funds, custom target date funds, and managed accounts, highlighting where adoption of alternatives is more likely to occur in the near term. Eric anticipates a significant increase in DC allocations to private markets over the next decade, driven by managed accounts and custom target date funds, with private credit potentially leading the way.