By Meg Short | Updated on Jun 09, 2026 at 01:12 PM
The potential flow of 401(k) retirement money into private markets risks putting managers under pressure to invest quickly and may end up exacerbating demand for redemptions, said Monroe Capital’s chief Ted Koenig.
The size of the influx is going to bring increased volatility to private credit and private assets, Koenig said, speaking at the annual SuperReturn conference in Berlin. That’s a risk given the industry is already suffering from a wave of redemptions from retail clients worried about the impact of AI on portfolios.
“Money can come in quickly, but it can also come out quickly, and you’ve seen what happens when it goes out quickly to some of the big managers,” said Koenig, the chief executive officer of Monroe Capital, which is now limiting redemptions from one of its private credit funds for the first time.
“When this $20 trillion of 401(k) money comes into the private markets, all bets are off,” he said in an interview on Tuesday. That doubles down on comments last month that he was concerned about 401(k) money and that institutions didn’t want retail cash invested along with them.
The US administration is pushing forward with opening up retirement pots, or so-called 401ks, for private market assets, with President Donald Trump signing an executive order to do so in August. That will certainly boost assets under management, but Koenig warned it would increase the challenges too.
Read more: Private Markets Elite Gather in Berlin With Not-So-Super Returns
The industry is convening at an uncertain time, as warnings of a credit downturn and some significant writedowns have halted a golden few years of breakneck growth and buzz around the sector. While the industry’s performance is better than the gloom portrayed in the media, according to Arcmont Asset Management’s founder Anthony Fobel, others are worried redemptions will continue.
For those sitting on big pots of cash following previous successful fundraising cycles, 401(k)s may be a poisoned chalice, Koenig said. There is already a supply and demand problem for investment opportunities, due to tariffs, the Iran war and a drop in M&A activity, he added.
“Money has to get deployed immediately. You’re going to see asset bubbles, and I think it’s going to be dangerous,” he said.