Blackstone Launches New Unit to Channel Retirement Savings into Private Investments

Leading asset manager Blackstone (BX.N) announced on Wednesday that it has launched a new division aimed at expanding retirement fund investments into private markets — an opportunity that could be worth several trillion dollars in the United States alone.

Momentum for tapping into this sector grew in August when U.S. President Donald Trump signed an executive order directing the Labor Secretary and Securities and Exchange Commission to make it easier for everyday savers to invest in alternative assets through popular 401(k) retirement plans.

Alternative assets typically include private equity, private credit, real estate, and cryptocurrencies.

In a statement, Blackstone said the new unit will focus on building partnerships and developing products for defined contribution plans — programs in which both employers and employees contribute, but where returns at retirement are not guaranteed.

The unit will operate under Blackstone’s Private Wealth division, which currently manages about $280 billion in assets.

Supporters of expanding retail access to private assets argue that it could offer investors higher potential returns and greater portfolio diversification, while critics warn that such investments carry higher risks, lower transparency, and greater fees than the highly regulated, publicly traded securities that traditionally dominate 401(k) plans.

Blackstone President and Chief Operating Officer Jonathan Gray said in a statement,

“For decades, the world’s largest and most sophisticated institutional investors have benefited from the strong returns and diversification available in private markets. Our goal is to become the preferred partner for retirement solution providers.”

The firm said Heather von Zuben will head the new unit, transitioning from her role overseeing open-ended credit funds. Tom Nides, a former U.S. ambassador to Israel and longtime Morgan Stanley executive, will serve as chair, while Paul Quinlan, previously CFO of Blackstone’s real estate business, will lead the unit’s U.S. operations.

Other private market firms, including Apollo and Blue Owl Capital, have also partnered with asset managers to create hybrid funds combining public and private investments for defined contribution markets.

According to the Investment Company Institute, as of June 30, Americans held approximately $9.3 trillion in 401(k) retirement plans.