Quick Take

Part 2: Private Capital and the Public’s Right to Know

August 5, 2026

Our previous post argued that the Labor Department’s proposal to open 401(k) accounts to private capital puts your retirement at risk, for the simple reason that private capital is struggling right now. But if the Trump administration pushes ahead anyway, there’s a silver lining: a chance for an important reform. If private capital is going to be “democratized” for ordinary investors, then the public should demand the democratization of private capital reporting too.

Private capital isn’t really private. Pension funds account for over a quarter of private capital investment, and even more comes from nonprofit endowments and government investment funds, or sovereign wealth funds. The large role played by public and public-minded investors in private capital has always been the most fundamental argument for more public transparency. That argument grows stronger if the barriers are lowered between private equity and trillions in 401(k) savings, too.

Right now, private funds only have to disclose the most general fee information—and no data at all on what they actually own or invest in. In 2024, the Fifth Circuit Court of Appeals struck down the Biden SEC’s Private Fund Adviser Rules that would have required detailed quarterly data and audited annual financials. Now the Trump SEC is proposing that fewer private funds should file confidential reports to regulators at all.

The lack of disclosure poses an ever-greater risk to the economy as private lending grows, with private equity firms acting as major lenders, and the companies they own as major borrowers. At the firm level, investors are unable to evaluate which private funds are exposed to risky bets, such as overextended AI businesses or software businesses vulnerable to AI displacement. At the broader level of the whole economy, investors can’t evaluate the fear expressed repeatedly by both the IMF and JPMorgan CEO Jamie Dimon: that private debt may trigger a new financial crisis.

In the near term, if the Labor Department insists on finalizing its 401(k) rule, it should require private capital firms that want the rule’s protection to make the same kind of detailed private reports—on fees, cash-out terms, and performance, down to the level of individual portfolio companies—that it already gives its big clients, using the same standard templates. This would place retirement savers on an equal footing with the investors who already demand this information. But there’s a catch: the best private capital clients would still have the power to demand information that goes beyond standard private disclosure. Only a new law could ensure that all investors in private capital funds receive the same information, and really “democratize” this market.

A future Congress should require all private capital funds to publicly disclose financial and ownership data for their funds, loans, and the companies they invest in, including their investors, fees, and returns. Private capital firms that won’t meet that standard should lose access to the public’s 401(k) savings.

For a fuller elaboration of the NYU Stern Center for Business and Human Rights’ views on the 401(k) rule, see the Center’s comment letter to the Department of Labor.

Michael Goldhaber, a senior research scholar at the NYU Stern Center for Business and Human Rights, wrote the recent report, Private Equity and Healthcare: Balancing Profit and Wellness.

Values-Based Investing