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A potential presidential executive order to facilitate investment in private assets for U.S. retirement plans, including 401(k)s, would provide alternative investment managers (Alt IMs) an additional avenue of growth from the $12.2 trillion defined-contribution market.
While sustained increases in the size and diversity of AUM can be positive for Alt IM rating profiles, Fitch would weigh these against the accompanying potential regulatory, legal and reputational risks. Alt IMs are facing heightened disclosure requirements pertaining to liquidity, fees, valuations and potential conflicts of interest given the increased regulatory and political scrutiny of the size and interconnectedness of the private credit market.
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