Fenrir Research · The Barbell Decade · Continued from Parts I–V

Part VI · The Institutional Unlock and the 401(k) Frontier

Parts I through V have established the structural mechanics of the barbell. The remaining variable that determines its pace and ultimate size is regulatory. The single largest pool of capital in the American economy — the $26+ trillion that sits inside defined contribution plans and individual retirement accounts — has historically been excluded from alternatives by a combination of statutory, regulatory, and fiduciary-litigation barriers. That exclusion is now being dismantled. This Part walks the mechanics of the unlock and the AUM implications that follow.

VI.1 · The asset base in question

The scale of the U.S. retirement system is worth stating precisely because it determines the size of the unlock. Defined contribution plans (401(k), 403(b), 457, federal Thrift Savings Plan) hold approximately $12 trillion in aggregate participant assets, covering more than 90 million American workers. Individual retirement accounts hold another $14–15 trillion. The combined $26+ trillion is the largest single pool of financial assets in any country globally, larger than the AUM of the entire global hedge fund industry and approaching the size of the global private equity industry. Alternatives currently represent less than 1% of that combined base. By contrast, defined benefit pension plans — whose participants do not directly select investments — allocate an average of 14–16% to private equity and other alternatives, according to the Public Plans Database. The asymmetry is not driven by investor preference; it is driven by the regulatory regime that governs the two structures.

VI.2 · The regulatory pivot — Executive Order 14330

On August 7, 2025, President Trump signed Executive Order 14330, titled Democratizing Access to Alternative Assets for 401(k) Investors. The order directs the Department of Labor, the Securities and Exchange Commission, and other federal agencies to reexamine the existing regulatory and guidance regime that has historically discouraged DC plan fiduciaries from offering access to alternative investments — specifically private equity, private credit, real estate, infrastructure, actively-managed digital asset vehicles, commodities, project financing, and lifetime income investments. The order does not by itself change existing law; what it does is signal a fundamental shift in the policy posture and instruct the agencies to remove the regulatory friction that the policy regime had previously created.

Five days later, on August 12, 2025, the Department of Labor formally rescinded the December 2021 Supplemental Statement issued under the Biden administration, which had warned plan fiduciaries that private equity investments were unlikely to be suitable for DC plan participants. That rescission removed the most explicit regulatory cautionary signal that had been deterring plan sponsors from considering alternatives. The Deputy Secretary of Labor described the previous guidance as “stifling” in the announcement.

The follow-through has been substantive rather than rhetorical. On March 30, 2026, the Department of Labor issued a proposed regulation that would expressly permit DC plan fiduciaries to offer investment options providing exposure to a broad range of alternative assets, accompanied by a “process-based safe harbor” framework that protects fiduciaries who follow the prescribed due diligence process. Separately, in January 2026, Congressman Troy Downing introduced the Retirement Investment Choice Act, which would codify EO 14330 into permanent statute and direct the DOL and SEC to reduce regulatory barriers more durably. The SEC has been directed to reexamine the accredited investor and qualified purchaser thresholds that have, in their current form, excluded most DC plan participants from accessing private market vehicles.

The combination of executive order, agency rescission, proposed regulation, congressional codification effort, and SEC review represents the most significant regulatory pivot affecting U.S. retirement plan investment options since the 1974 Employee Retirement Income Security Act itself. The direction of travel is unambiguous. The remaining question is implementation pace, not policy intent.

VI.3 · The product architecture — how alternatives actually enter the 401(k)

The regulatory pivot is necessary but not sufficient. The mechanism by which alternative investments enter participant-directed retirement portfolios is product structure, and the product architecture that has emerged over 2024 and 2025 is the second major development worth understanding. Three vehicles are doing the work.

Target-date funds with embedded alternatives sleeves

The most important vehicle. Target-date funds are the default investment option in the vast majority of 401(k) plans — approximately 60% of plan participants are invested in TDFs by default, and TDF assets exceed $4 trillion globally. The product structure is uniquely well-suited to alternatives integration because the fund manager controls the allocation glide path centrally and the participant does not need to make individual decisions about alternative asset allocation. The leading TDF launches with embedded alternatives include State Street Global Advisors’ April 2025 target-date series with a 10% allocation to private assets managed by Apollo (CIT-structured); Fidelity Investments’ CIT-based TDF series with a 5% allocation to private real estate, launched October 2023; Neuberger Berman’s July 2024 TDF launch incorporating private equity co-investment via Lockheed Martin Investment Management Co.; and the BlackRock–Great Gray target-date series, which uses a custom glide path with a private markets sleeve accessed through BlackRock’s evergreen interval fund. BlackRock’s own research estimates that incorporating private equity and private credit into a target-date solution can generate approximately 15% more retirement assets over a 40-year participant career, with roughly 50 basis points of annual return uplift.

Collective Investment Trusts (CITs) for direct menu placement

The second vehicle. CITs are bank-administered trusts that pool ERISA-plan assets and are exempt from the Investment Company Act of 1940, allowing them to hold portfolios of private market investments at scale. CITs cost less than mutual funds, provide institutional fee economics to DC plan participants, and have liquidity arrangements that allow plan-level operations to function smoothly. The largest DC plan operational announcement of 2025 was the Empower private markets investment partnership program. Empower — the second-largest U.S. retirement plan record-keeper with $1.8 trillion under administration and 19 million participants — launched the program in May 2025 with partnerships across Apollo, Franklin Templeton, Goldman Sachs, Neuberger Berman, PIMCO, Partners Group, Sagard, and Northleaf. Blackstone joined in January 2026, adding the world’s largest alternatives manager to the platform. Empower’s structure provides plan participants with CIT-wrapped exposure to private equity, private credit, and private real estate, accessed through professionally-managed accounts rather than through the unstructured plan investment menu.

Evergreen and interval fund underlying structures

The third vehicle, layered underneath the first two. The evergreen and interval fund architecture detailed in Part III is the engine that makes TDF and CIT integration mechanically possible. Private market drawdown funds with capital calls and multi-year deployment periods cannot fit inside a TDF or CIT structure that needs to value participants’ accounts daily and process subscriptions and redemptions continuously. Evergreen funds — with NAV pricing, periodic liquidity, and continuous capital deployment — can. BlackRock’s interval fund, Apollo’s evergreen credit and equity products, Partners Group’s PRIMEX, and the broader category of semi-liquid vehicles are the foundation layer on which the entire DC plan alternatives integration is being built.

VI.4 · The AUM implications — what 5% migration looks like

The AUM unlock that follows from the regulatory pivot and product architecture is mechanical to calculate. The combined DC plan and IRA asset base is approximately $26 trillion. If even 5% of that base migrates into alternatives over the next decade, that represents $1.3 trillion of new alternatives AUM. At 10% migration, the figure is $2.6 trillion. At the 20% allocation that Larry Fink’s 50/30/20 proposal would imply for a fully-integrated retirement portfolio, the figure approaches $5.2 trillion. For context, the entire current alternatives industry stood at approximately $20 trillion in 2025 and is projected to reach $32 trillion by 2030 per Preqin. The DC plan unlock alone could provide one-quarter to one-third of that growth.

Source: Fenrir Research scenario construction. Base is approximate combined DC plan + IRA asset base of $26 trillion. Migration percentages applied as full-allocation equivalents.

The base case scenario — 5% migration generating roughly $1.3 trillion of new alternatives AUM — is the figure to anchor on. It corresponds to an average DC plan allocation of 5% to alternatives, which is the current Fidelity TDF model and roughly half of the State Street–Apollo TDF allocation. Adoption pace depends on three variables: how quickly large plan sponsors update their investment policy statements; how rapidly the major TDF providers (Vanguard, Fidelity, T. Rowe Price, BlackRock, State Street) embed alternatives into their default offerings; and how the litigation environment evolves once the DOL safe harbor is finalised. The TDF integration variable is the most consequential because TDF inclusion produces near-universal participant exposure without requiring individual allocation decisions.

VI.5 · The risk and the litigation overlay

The argument against rapid DC plan alternatives integration is not insubstantial and deserves a precise treatment. Three concerns dominate the dissent.

Fee transparency and disclosure. Private market funds historically charge 100–200 basis points of management fee plus carried interest, materially higher than the 5–15 basis points that retail 401(k) participants pay in index TDFs. Even with the CIT-wrapped institutional fee structure of the DC plan products being launched, the effective fee uplift to participants is meaningful. ERISA fiduciary duties require plan sponsors to ensure that fees paid by participants are reasonable relative to services provided. The question of whether 50–100 basis points of incremental fee for a 5–10% alternatives allocation is “reasonable” will be litigated repeatedly.

Liquidity mismatch. DC plan participants can request distributions, hardship withdrawals, or in-service rollovers on relatively short notice. Private market fund underlying assets cannot be liquidated on demand. The evergreen and interval fund architecture mitigates this but does not eliminate it — in periods of severe market stress, the redemption gates that protect the fund structurally also constrain participant access to their own assets. The fiduciary obligation to ensure plan-level liquidity is a meaningful constraint.

Performance dispersion and manager selection. Public equity index returns are nearly identical across competing index funds. Private equity returns dispersion is wide — the gap between top-quartile and bottom-quartile manager IRR is often 1000+ basis points. The fiduciary duty to select prudent investments imposes manager-selection responsibilities on plan sponsors that they have not historically been equipped to discharge. This is the most analytically substantive concern. The Goodwin Law commentary on the EO explicitly notes that the Biden-era 2021 Supplemental Statement expressed scepticism that plan-level fiduciaries, particularly those overseeing small DC plans, would possess the necessary expertise to evaluate private equity investments prudently. That scepticism does not disappear because the policy environment has changed.

The litigation overlay is therefore real. ERISA participant lawsuits over investment selection, fee reasonableness, and fiduciary breach are likely to increase as alternatives enter DC plan menus. Plan sponsors will manage this risk through enhanced due diligence, third-party fiduciary services (Empower’s managed account structure is partly designed to address this), and reliance on the DOL safe harbor once finalised. The risk does not derail the unlock; it modulates its pace and shape.

Part VII · The 2030 Portfolio

The seven parts of this report have established the structural mechanics of the barbell, the demographic forces driving its acceleration, the product architecture enabling its expression, the scale of the alternatives pie, the centrality of infrastructure as the flagship allocation, and the institutional unlock that is now in motion. Part VII closes the report with a forward construction: what the median portfolio actually looks like in 2030 under three scenarios, who the manager winners are, and the Fenrir Research view on which scenario is most likely.

VII.1 · Three scenarios for the 2030 portfolio

The scenarios below are not equally probable. They are bracketing constructions that allow the reader to see the range of outcomes the structural forces could produce. The base case (accelerated barbell) is the Fenrir Research central scenario. The gradual evolution and regulatory-stalled scenarios bracket it on either side.

VII.2 · The implied 2030 portfolio — three investor archetypes

The table below translates the central (base case) scenario into median portfolio allocations for three investor archetypes in 2030. The contrast with current allocations is the structural argument of this report expressed numerically.

Source: Fenrir Research scenario construction, base case. Median HNW figures synthesised from BofA Private Bank 2024 Study, Cerulli HNW Markets 2024, and Preqin 2030. Younger HNW = ages 21–43. DC Plan TDF = participant invested in an alternatives-enabled target-date fund.

Three observations from the table merit emphasis. First, the public equity allocation contracts materially across all three 2030 archetypes — from 55% currently to 35–55% depending on segment. This is not a bearish view on equities; it is the mechanical consequence of allocating 10–20 percentage points more to alternatives. Second, the younger HNW archetype reaches 42% total alternatives allocation, broadly consistent with the BofA Private Bank survey’s finding that younger HNW investors today already hold 31% in alternatives and crypto and plan to allocate more. The 2030 figure is therefore an extrapolation rather than a leap. Third, the DC plan TDF archetype reaches 10% total alternatives — modest in absolute terms, but applied across $12 trillion of DC plan assets, the AUM implication is over $1 trillion of new alternatives capital deployment by 2030 from this channel alone. The numbers cohere.

VII.3 · The manager winners

The economics of the barbell decade concentrate at the ends of the value chain. On the passive end, the index ETF and direct indexing categories are dominated by a small number of mega-platforms with overwhelming scale advantages. On the alternatives end, the largest five managers are positioned to capture a disproportionate share of the AUM growth because of their combination of scale, distribution access, and product architecture. The middle — traditional active asset managers without a meaningful presence at either end — faces structural margin compression and likely consolidation. The table below summarises the Fenrir Research view on the manager landscape into 2030.

Source: Fenrir Research synthesis. Not a recommendation. Manager AUM, distribution position, and strategic positioning as of Q1 2026.

The single most strategically positioned firm is BlackRock. The combination of iShares (the dominant passive franchise), GIP (the second-largest infrastructure platform), HPS (a top-five private credit platform), Preqin (the industry data layer), Aperio (top-five direct indexing), and BlackRock’s evergreen interval fund (the underlying engine for the Great Gray and other DC plan TDF integrations) is unmatched. No other firm has positioned at both ends of the barbell at scale. The acquisitions executed in 2024–2025 (GIP, Preqin, HPS) form a coherent strategic package, and Larry Fink’s 50/30/20 advocacy is not coincidental — the firm has built the product architecture to capture the 20% as well as the 50% and the 30%. This is the most consequential firm-level strategic outcome of the barbell decade.

VII.4 · The Fenrir Research view

The structural reorganisation of asset management is not a forecast. It is the current condition of the industry, observable in flow data, AUM crossover figures, manager M&A activity, regulatory pivot, product launch cadence, and survey evidence of investor preference. The base case 2030 portfolio described above is therefore an extrapolation of trajectories that are already established rather than a projection of trajectories that have not yet begun. The remaining uncertainty is pace, not direction.

For the asset management industry, the implications are clear. The economics of the value chain reorganise around the two ends of the barbell. Capital captures premium fees on the alternatives end, scale economics and distribution moats on the passive end, and structural margin compression in the middle. Manager consolidation continues. The BCG estimate that up to 20% of existing asset management firms may be acquired or eliminated is more likely conservative than aggressive.

For investors, the implications depend on segment. Institutional investors are already executing this transition; the gap between institutional and retail allocation reflects structural and regulatory barriers rather than information asymmetry. HNW investors and family offices have the autonomy to construct portfolios at the 30–42% alternatives weight that the analytical case supports. Retail investors and DC plan participants will participate through the TDF and CIT product architecture being built today, with allocation pace determined by the regulatory environment and the litigation outcomes that follow. The democratisation thesis is real but its expression for the average participant will be modest in the near term — a 5–10% alternatives allocation in a TDF rather than the 30%+ that a sophisticated HNW investor will hold.

For the alternatives industry, the implications are bullish but selectively so. Categories with structural demand drivers and limited supply — infrastructure, private credit, secondaries — capture disproportionate AUM growth. Categories that depend on a return premium that is not structurally durable — particularly hedge funds in their traditional form — face slower growth and continued share loss within alternatives. The geographic and sectoral pattern described in Part V repeats here: the structural opportunities and the differentiated opportunities are uneven across categories, and manager and product selection matters more than gross category exposure.

For the cultural and analytical question that opened this report — whether asset management is having its Kid A moment — the answer at this stage of the cycle is yes. The form is being rebuilt. The firms that recognise this and reposition to the ends of the barbell are constructing the asset management industry of the 2030s. The firms that continue to optimise the OK Computer template will be acquired, absorbed, or made irrelevant by the slow attrition of fee compression and product format obsolescence. The reckoning is being made, slowly and deliberately, and the new equilibrium is already taking shape.

Sources · Parts VI & VII

The White House, Executive Order 14330, Democratizing Access to Alternative Assets for 401(k) Investors (August 7, 2025). U.S. Department of Labor, rescission of December 2021 Supplemental Statement (August 12, 2025). U.S. Department of Labor proposed regulation on alternative assets in DC plans (March 30, 2026). Retirement Investment Choice Act (House, January 2026). Empower private markets investment partnership program announcements (May 2025 launch; Blackstone addition January 2026). State Street Global Advisors target-date series with Apollo (April 2025). BlackRock–Great Gray target-date series. Fidelity Investments CIT-based TDF series. Neuberger Berman TDF with Lockheed Martin Investment Management Co. (July 2024). BlackRock Investment Institute, Alternative Investments in Target Date Funds (2025). Investment Company Institute Fact Book 2025 retirement assets data. Public Plans Database. Goodwin Law, Kirkland & Ellis, Groom Law Group, Ogletree, Seyfarth Shaw, Torys, A&O Shearman client alerts on EO 14330. BCG Global Asset Management Report 2025. Cerulli Associates, U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2024. Bank of America Private Bank, 2024 Study of Wealthy Americans. Preqin Private Markets in 2030 Report (October 2025). Larry Fink, BlackRock 2025 Annual Shareholder Letter.

DISCLAIMER · This analysis is for informational purposes only. Not investment advice. All forward-looking assessments are analytical judgements of Fenrir Research based on cited sources. Past performance is not indicative of future results. Probability estimates in Part VII are analytical judgements of Fenrir Research and are not market-implied.

Fenrir Research · The Barbell Decade · Continued from Parts I & II

Part III · Product Innovation: The Barbell Forms

The barbell is not a forecast. Both ends already exist as live product categories with measurable AUM, growing flows, and identified manager winners. What is changing is which end captures the marginal allocation and at what pace. This Part walks the structure of each end — the passive core and the alternatives satellites — and the economics that determine which managers prosper on each side.

The passive core: cheaper, smarter, more personalised

The passive end of the barbell is not just index ETFs at five basis points. It has evolved into a layered product stack that delivers different forms of beta with different degrees of customisation, while keeping the cost structure low enough that no active manager can compete on price. The most consequential innovation in the last decade is not the index ETF itself but the products built around the index ETF concept that extract additional value from a passive framework. Four product families define this stack today.

Index ETFs — the floor

The floor of the passive stack. Broad-market index ETFs from Vanguard, BlackRock iShares, State Street SPDR, and Schwab now charge between 3 and 10 basis points for total-market or S&P 500 exposure. The 2025 Vanguard fee cut across 87 funds returning $350 million annually to investors is the most visible recent reinforcement of the race to zero. Among the largest issuers, the two leaders control 31% and 27% of total ETF AUM respectively, and the top four issuers hold 80% of the ETF market. Scale matters here in a way that does not exist in traditional active management — an index ETF at $300 billion AUM is meaningfully cheaper to run per dollar than the same product at $30 billion, and the cost savings can be passed to investors as fee cuts that further accelerate AUM gains. This is the flywheel that makes index ETFs structurally durable as a product category.

Direct indexing — the personalisation layer

Direct indexing is the most underappreciated passive innovation of the past five years. Rather than purchasing a fund that tracks an index, investors purchase the underlying constituents of an index directly inside a separately managed account, and the manager runs the portfolio against the benchmark with the ability to harvest tax losses on individual positions, screen out names for ESG or values reasons, transition appreciated stock without immediate gain realisation, and tilt exposures based on client preference. Cerulli reports direct indexing AUM closed 2024 at $864 billion, nearly double the 2021 level, and projected to cross $1 trillion in 2025. Cerulli’s forecast has adoption of direct indexing outpacing ETFs, traditional SMAs, and mutual funds over the next five years at a 12.1% annual growth rate — the fastest-growing passive product format in the industry.

Direct indexing is structurally consequential because it solves the single biggest objection to passive investing for taxable wealth clients: that index funds cannot deliver tax alpha. A direct-indexed portfolio can systematically realise losses on individual constituents while the headline index is up, generating a stream of capital losses that offset gains elsewhere in the client’s portfolio. For high-tax investors, the after-tax return on a direct-indexed S&P 500 portfolio can exceed the after-tax return on an S&P 500 ETF by 75–150 basis points annually depending on market volatility — a real advantage that justifies a 25–40 basis point management fee. Market share is concentrated: the top five providers — Morgan Stanley/Parametric, Goldman Sachs Asset Management, Northern Trust, BlackRock/Aperio, and Fidelity — control 87% of direct indexing AUM. Morgan Stanley’s Parametric platform alone has been growing assets at 50%+ year-over-year since the Eaton Vance acquisition closed.

Quant-enhanced, factor, and systematic ETFs

The middle of the passive stack. Factor ETFs (value, momentum, quality, low volatility, dividend), smart-beta strategies, and systematic active ETFs occupy the space between pure index tracking and traditional active management. Pricing typically runs 15–40 basis points — expensive relative to broad-market ETFs, but cheap relative to traditional active mutual funds. The category is dominated by BlackRock, Dimensional Fund Advisors, Invesco, and AQR-style systematic shops. From an industry-structure perspective, this category is the natural migration path for assets currently sitting in traditional active mutual funds that are too closet-indexed to justify their fees. As DFA and similar shops have demonstrated, a systematic factor approach can deliver most of the value-add that active stock-pickers claim to deliver, with lower fees, better tax efficiency through the ETF wrapper, and higher capacity.

Thematic ETFs

The most distribution-driven part of the passive stack. Thematic ETFs (AI, cybersecurity, clean energy, robotics, blockchain, defence) sit at the intersection of passive product structure and active narrative. They are technically passive — they track a defined index — but they are sold and bought as expressions of a thematic view rather than as broad beta exposure. The category is structurally well-suited to the social-media-driven information ecosystem that younger investors operate in, because each thematic ETF maps to a narrative that can travel virally. ARK Invest is the canonical case study, but the more durable winners are the larger issuers (BlackRock iShares, Invesco, Global X) who can launch thematic products quickly and scale them through wirehouse distribution. Pricing on thematic ETFs is materially above broad-market index ETFs — typically 40–75 basis points — which makes them a margin-protective product category for issuers facing fee compression elsewhere.

Sources: ICI Fact Book 2025; Cerulli direct indexing report 2025; Morningstar; TD Securities U.S. ETF Recap 2025. Fenrir Research compilation.

The alternatives end: democratised access, evergreen vehicles, tokenisation

The right side of the barbell is undergoing a more dramatic architectural reinvention than the left. For four decades, alternative investments were structured as closed-end drawdown funds with 8–10 year lockups, $5–10 million minimum commitments, capital calls drawn down over multi-year deployment periods, and access restricted to qualified institutional and ultra-high-net-worth clients. That structure is now being parallel-engineered into an entirely different product format designed for the private wealth and retail-adjacent channels. The result is a new generation of access vehicles — evergreen funds, interval funds, non-traded BDCs and REITs, ELTIFs and LTAFs in Europe, and tokenised funds — that together represent the most consequential product innovation in alternatives since the LP/GP fund structure itself.

Evergreen / semi-liquid funds — the new default access vehicle

Evergreen funds are the structural centre of the new alternatives architecture. Unlike traditional drawdown funds, they accept and redeem capital on a periodic basis (typically quarterly or semi-annually) at NAV, deploy capital immediately rather than over a multi-year drawdown, and offer no defined termination date. From a wealth distribution standpoint, this transforms the buying experience: a financial advisor can subscribe a client into an evergreen private equity fund in a single transaction, deploy 100% of the commitment immediately, and offer the client periodic redemption windows — all without the operational complexity of capital calls, distributions, and J-curve management that institutional LPs accept.

The growth metrics are unambiguous. PitchBook projects private evergreen fund AUM to grow from $2.7 trillion in 2024 to $4.4 trillion in 2029 — a 10%+ annual growth rate that outpaces traditional drawdown funds. Evergreen funds accounted for 14% of total private capital AUM in 2024 and are expected to reach 18% by 2029. Inside the equity-focused segment, the acceleration is even more dramatic: HSBC Asset Management’s analysis of the 16 largest SEC-registered private-equity-focused evergreen funds shows assets grew from $10 billion at end-2021 to $61 billion at end-2025 — a more than sixfold increase, with 68% growth in 2025 alone. Morningstar’s broader semi-liquid fund definition (including interval funds, tender offer funds, non-traded REITs, non-traded BDCs, and similar vehicles) reports the category crossed $530 billion at year-end 2025, up more than $100 billion from 2024. The XAI year-end 2025 market update separately tracks 158 interval funds with $156 billion in managed assets and 150 tender offer funds with another $120 billion — 67 new funds launched in 2025, up from 50 in 2024, with 13 new fund sponsors entering the market including Blue Owl, Coatue, and Adams Street.

Business Development Companies (BDCs) — the private credit access engine

Non-traded BDCs are the dominant access vehicle for private credit allocation by retail and HNW investors. BDCs are SEC-registered investment companies that hold portfolios of middle-market loans and earn current yield that is distributed to shareholders. Blackstone’s BCRED — the flagship retail-facing private credit fund — held $82.7 billion in investments by early 2026 and has delivered a 9.8% annualised return since inception. Yields on the BDC sector range from 10% to 12% in the current environment, with current income making them particularly attractive to HNW investors seeking yield in the absence of attractive fixed income alternatives. Fitch Ratings reported $11.7 billion in BDC issuance through June 2025 even as the broader private credit fundraising environment slowed. Apollo, Ares, Blackstone, KKR, and Owl Rock (Blue Owl) are the dominant sponsors. The BDC category has become the most efficient distribution channel between institutional private credit origination and the retail demand pool — and its growth is the single best leading indicator of the broader retail democratisation of private markets.

Tokenisation — the next architectural layer

Tokenisation of private market funds is the emerging frontier and warrants identification even though AUM remains small relative to traditional access vehicles. The most visible example is BlackRock’s BUIDL fund, a tokenised money market fund deployed on Ethereum that crossed $2 billion in AUM in early 2025. Franklin Templeton, Ondo Finance, and Hamilton Lane have all launched tokenised private market access products. The structural logic is that tokenisation can deliver three things the current evergreen architecture cannot: 24/7 secondary market liquidity (via on-chain transfer), fractional ownership at much lower minimums (as low as $1,000 vs. $25,000+ for typical interval funds), and programmable compliance via smart contracts. For the Fenrir Research view, tokenisation is not yet investable as an alternative-access category at scale, but the architectural direction is clear: the institutional drawdown fund will continue to be the dominant vehicle for institutional LPs, while tokenised evergreen products will progressively absorb retail allocation as regulatory frameworks mature.

Part IV · The Alternatives Pie Expanding

The product architecture in Part III answers how capital is moving into alternatives. Part IV addresses the size of the destination and the manager economics that determine who captures the flow. The headline figures are large enough to be worth stating upfront: Preqin’s October 2025 Private Markets in 2030 report — the first published under BlackRock ownership — projects global alternatives AUM to reach $32 trillion by 2030, up from $16.8 trillion at end-2023. That is a near-doubling in seven years, against the backdrop of a slowdown in private equity fundraising and a flat-to-down hedge fund category. The growth is asymmetric: private credit and infrastructure are the engines.

Where the $32 trillion sits in 2030

Sources: Preqin Private Markets in 2030 Report (October 2025); Preqin Future of Alternatives 2029. Categories may overlap (e.g. infrastructure debt sits inside private credit definitions). Fenrir Research consolidation.

Two observations on the category mix deserve emphasis before walking through the manager landscape. First, the growth is not evenly distributed. Private credit, infrastructure, and secondaries are growing at low double-digit rates; private equity is growing at a still-substantial rate but materially below its prior decade; hedge funds are barely growing at all. The relative shift inside alternatives matters as much as the headline growth — managers concentrated in the slower-growth categories will see AUM share decline even as their absolute AUM rises. Second, infrastructure is on the verge of becoming the third-largest alternative asset class by 2030, behind only private equity and hedge funds and ahead of real estate. That category re-ranking is the structural justification for treating infrastructure as the flagship Part V section of this report.

The manager landscape: consolidation at the top

The alternatives industry is structurally more concentrated than traditional asset management at its peak, and the concentration is intensifying. Five firms — Blackstone, Brookfield, Apollo, KKR, and Carlyle — together manage close to $5 trillion of the $20+ trillion currently in alternatives. Each is pursuing a similar strategic playbook with slightly different emphasis: build out private credit (the highest-growth category), integrate insurance balance sheets to provide permanent capital, expand into retail and HNW distribution through evergreen products, and consolidate adjacent specialist managers via M&A.

Sources: Company disclosures and earnings releases through Q3 2025. S&P Market Intelligence November 2025. Fenrir Research compilation.

The insurance balance sheet integration — the most consequential strategic move

The defining strategic move of the alternatives industry over the past five years has been the integration of insurance balance sheets with private credit platforms. Apollo’s full acquisition of Athene completed in 2022 set the template — an insurance company holds long-duration liabilities (annuities, structured settlements) that match well against long-duration private credit assets, and the asset manager parent earns a spread on the asset side plus management fees plus origination fees. The result is permanent capital that does not need to be raised in periodic fundraising cycles, immune to the LP commitment slowdowns that have plagued the closed-end fund industry since 2022.

Apollo is the cleanest expression of the model: private credit now represents approximately 82% of Apollo’s $785–938 billion AUM, with much of that credit funded by Athene insurance liabilities rather than external LP commitments. KKR (via Global Atlantic), Carlyle (via Fortitude Re), and Blackstone (via partnerships with Corebridge, AIG retirement, and others) have built similar though structurally distinct insurance integrations. BlackRock’s 2024 Global Insurance Report found that 91% of surveyed insurers plan to increase private asset allocation in 2025 and 2026 — the demand pull from the insurance industry alone is sufficient to drive material AUM growth at the insurance-aligned managers for the remainder of the decade. The fee economics on insurance-aligned AUM are lower per dollar than traditional LP AUM but the dollar volumes are large enough and the AUM is permanent enough that the model is structurally superior to traditional drawdown fundraising.

Private credit — the asset class that swallowed the industry

Private credit is the single most consequential asset-class shift inside alternatives. The category has grown from a niche middle-market lending strategy in 2010 to the dominant alternative credit channel today, with Preqin forecasting AUM to nearly double from $2.28 trillion in 2025 to $4.5 trillion by 2030. Direct lending to sponsor-backed middle-market borrowers is the largest sub-strategy, but the category now extends across infrastructure debt, asset-backed financing, commercial real estate debt, consumer credit, and specialty lending. The structural drivers are clear: bank regulation since the global financial crisis has progressively pushed leveraged middle-market lending off bank balance sheets and into non-bank lenders; corporate borrowers prefer the speed and certainty of execution of a single private credit lender versus a syndicated loan; investors prefer the floating-rate, illiquidity-premium, current-income profile of private credit relative to traditional fixed income in a higher-rate environment.

At the manager level, the consolidation in private credit is striking. The five largest private credit platforms — Apollo, Blackstone, KKR, Ares, and Carlyle — collectively manage well over $2 trillion of private credit assets. Ares is the only one of the five without a substantial insurance balance sheet, and it is correspondingly the most exposed to fundraising cyclicality. Apollo at $749 billion of credit (82% of total AUM) is structurally the largest, with the deepest investment-grade tilt suitable for insurance-funded deployment. Blackstone’s credit and insurance segment grew 18% in 2024 to $375 billion and reached $432 billion by Q3 2025, with credit now constituting 33% of Blackstone’s total AUM — surpassing private equity at 31% for the first time. That ordering swap inside Blackstone is symbolically important: the firm that built its reputation on private equity now generates more AUM from credit. The same shift is occurring across the industry.

Distribution: the wirehouse, RIA, and the retail frontier

The largest constraint on alternatives growth historically has been distribution access. Institutional LPs were the original customer base because they had the dedicated staff, due diligence resources, and minimum-commitment scale to engage with closed-end fund structures. As Part III established, the product architecture has now evolved to remove those constraints — evergreen funds, BDCs, interval funds, and tokenised products are accessible to clients with $25,000–$250,000 commitment sizes rather than the $5 million minimums of traditional drawdown funds. Distribution has correspondingly expanded into three channels that did not exist as material alternatives buyers a decade ago.

Wirehouses. Morgan Stanley, Merrill Lynch, UBS, and Wells Fargo wealth management have built dedicated alternatives platforms with curated manager rosters, training programmes for financial advisors, and integration into model portfolios. Morgan Stanley’s alternatives platform alone exceeds $200 billion in client assets. The wirehouse channel is the single largest growth lane for institutional-quality alternatives managers because each financial advisor on a wirehouse platform can place clients into evergreen alternatives funds with operational scale that direct-to-consumer channels cannot match.

Independent RIAs. Registered Investment Advisors managing roughly $9 trillion in U.S. private wealth assets have moved aggressively into alternatives over the past three years, supported by platforms like iCapital, CAIS, Yieldstreet, and Moonfare that provide due diligence, subscription processing, and reporting infrastructure. The RIA channel is structurally more open to manager diversity than the wirehouses (which curate to a small approved list), but each individual RIA places smaller dollar amounts. The aggregate is large; the per-relationship dollars are small.

Defined contribution retirement plans. The largest distribution channel that has not yet meaningfully opened. The 401(k) and IRA channel holds approximately $12 trillion of assets, of which less than 1% currently sits in alternatives. The August 2025 executive order on alternatives access in defined contribution plans and the broader regulatory environment that follows is the subject of Part VI — but its mention here is necessary because it is the single largest potential unlock for further alternatives AUM growth beyond 2030.

Where Part V Goes

Parts III and IV have established the product architecture and the manager landscape of the new barbell. Part V is the flagship section of this report and the centre of gravity of the Fenrir Research thesis on the next decade of capital allocation.

Part V · Infrastructure: The Flagship Allocation. The structural drivers — AI data centre capex, energy security in the post-2022 regime, energy transition and grid resiliency, demographic urbanisation. The return framework that positions infrastructure between core fixed income and traditional private equity. The manager landscape: Brookfield, BlackRock GIP, Macquarie, KKR Infra, Blackstone Infra, DigitalBridge, Stonepeak, IFM. And the regional deep-dives — structured analysis of the United States and Europe, differentiated deep-dives on the Middle East (post-conflict reconstruction, Vision 2030, regional water and power security) and India (the infrastructure deficit thesis, the National Infrastructure Pipeline, GIFT City), and a treatment of Africa as the multi-decade frontier. Epigraph: Radiohead · Pyramid Song.

Part V will be the longest section of the report. It will also include the largest set of charts and the most location-specific analysis. Read it as the operational manifestation of the structural thesis: if the alternatives pie grows to $32 trillion by 2030 and infrastructure becomes the third-largest category, where specifically does that capital go, in what form, and what return profile does it generate.

Sources · Parts III & IV

Cerulli Associates direct indexing market report 2025. Preqin Private Markets in 2030 Report (October 2025). Preqin Future of Alternatives 2029. PitchBook Q1 2025 Global Private Market Fundraising Report. Morningstar Guide to Semiliquid Funds, April 2026. HSBC Asset Management evergreen fund analysis 2025. Alter Domus 2025 Private Markets Year-End Review. XAI Investments Q4 2025 Market Update. Deloitte Center for Financial Services semi-liquid funds analysis 2025. S&P Global Market Intelligence private credit report, November 2025. BlackRock 2024 Global Insurance Report. BlackRock 2025 Annual Shareholder Letter. Apollo Global Management, Blackstone, KKR, Carlyle, Ares, Brookfield Q3 2025 earnings disclosures. Morgan Stanley Parametric direct indexing materials. Fitch Ratings BDC issuance analysis 2025. iCapital Future is Evergreen analysis.

DISCLAIMER · This analysis is for informational purposes only. Not investment advice. All forward-looking assessments are analytical judgements of Fenrir Research based on cited sources. Past performance is not indicative of future results.