For decades, private equity deals—those early-stage, high-upside, often high-risk investments—were reserved for the wealthiest investors and large institutions.
That’s starting to change.
On August 7, 2025, President Trump signed an executive order directing the Department of Labor (in consultation with the SEC) to expand access to private-market assets in 401(k) and similar retirement accounts.
What is private equity?Private equity is investment in companies that aren’t listed on public stock exchanges. These deals often involve buying stakes in private businesses, improving or growing them, and eventually selling at a profit. Investments are typically long-term, illiquid, and higher risk—but can also offer higher potential returns. |
In short, for the first time, everyday investors may be able to buy into private equity funds directly through familiar brokerage and retirement accounts.
Leveling the playing field sounds great on paper. But the reality isn’t so simple…
What exactly is an ‘accredited investor’?
Historically, the SEC has limited private-market investments to accredited investors—people or entities that meet certain financial thresholds.
Under the current definition, you’re accredited if:
- You have an annual income of at least $200,000 (or $300,000 with a spouse) for the past two years, or
- You have a net worth over $1 million, excluding your primary residence.
The logic: Private equity deals can be highly speculative, illiquid, and complex. Regulators assume wealthier investors have the means and resources to conduct proper due diligence… and can better absorb the loss if things go bad.
If you don’t meet those criteria, your access to such deals has historically been shut off.
Now, with the new rules, individual investors could have access to deals they’ve never had before—but there’s a catch…
Why the best deals don’t make it to the public
Even with the rule change, the truth is you’re unlikely to get into the truly elite opportunities.
The biggest money—pension funds, sovereign wealth funds, endowments, etc.—will continue to get first pick. They have established relationships with top-tier private equity managers… negotiating power to secure favorable terms… and dedicated teams to vet deals long before they’re marketed to anyone else.
By the time a deal makes it into a mass-market product for retail investors, it’s often because the prime slots have already been filled or the sponsor needs extra capital on less favorable terms.
What you will see are the leftovers… the riskier plays… the ones big money might be looking to unload.
Wall Street loves it when retail money floods into a hot trend because it provides liquidity. Institutions that got in early can sell their positions to you, often at much higher prices.
It’s a tale as old as time. History is full of examples where retail access came late in the game—often at inflated prices:
- SPAC boom (2020–2021): Institutions got in at $10 per unit pre-merger. Many retail buyers who bought after CNBC hype saw their shares plunge 50–80% within a year.
- Virgin Galactic (SPCE): Shares soared above $55 in early 2021 after a wave of publicity… then fell below $3 as reality set in.
- Cannabis stocks: Tilray hit $300 in 2018 amid legalization buzz. By 2020, it was trading under $10.
The lesson: Being “allowed in” doesn’t mean you’re getting in at the right time—or the right price.
An issue of democratized markets
While the new rule undoubtedly opens up individual investors to new risks… it also opens them up to opportunities they’ve never had before.
And now, the decision rests with the investor rather than the government.
The old rule assumes only the wealthy can understand risk or make smart financial decisions. But in reality, plenty of “qualified” investors lose money on bad deals, and plenty of “non-qualified” investors are perfectly capable of doing research and managing risk.
Moreover, the internet has leveled the information gap. Small investors now have unprecedented access to data, research tools, and expert analysis.
That doesn’t mean everyone should run out and buy private equity… but the real filter should be:
- Do you understand the deal?
- Can you afford to lose the money?
- Are you making an informed choice?
The real winners of the rule change
Whatever you think of the risks, one thing’s certain: This is going to be a massive growth driver for private equity giants like Apollo Global Management (APO). The firm already manages $840 billion in assets. By opening the private market to retail investors, its potential customer base just exploded.
BlackRock estimates there’s around $100 trillion in managed money across U.S. institutions. If just 1% of that flows into private equity, that’s $1 trillion in new capital chasing deals. Even a small slice of that pie could mean a double-digit boost to Apollo’s AUM—and its fee income.
Key considerations for investors
So, should you jump in the second your brokerage offers a private equity product? It’s really up to you and your personal risk tolerance.
If you decide to pursue private equity opportunities, here’s how to approach it:
- Understand the structure: Read the offering docs. Know how (and when) you can get your money out. Many private deals lock up your capital for years.
- Follow the incentives: Who’s selling you the deal, and why now? If big money’s exiting, ask yourself why.
- Size your bet: Private equity is a high-risk, high-reward proposition. Treat it as a speculative piece of your portfolio, not the core.
Access is great. But access without due diligence is just an invitation to become someone else’s exit strategy.
For more insight into the latest market moves—and how to play them—tune into Wall Street Unplugged Premium.
