Private Real Estate in 401(k) Plans: The Wrapper Did the Work
About 1,000 large 401(k) plans held a private real estate vehicle at the end of 2024, by the plans' own Form 5500 filings. But the plans and the dollars sit in different places.
Most plans came through a platform default
Most of the plans got there through an insurer's real estate account that comes with the recordkeeper's menu. Principal U.S. Property appears in 685 plans and the TIAA Real Estate Account in 131: between them, roughly 800 plans and about $1.3 billion, under $2 million a plan.
These are pooled separate accounts: insurance-company products that value daily, so they can sit on a participant menu like any other fund. Plans on Principal's recordkeeping platform hold the Principal account at about 13%, and plans on TIAA's at about 75%. Across the other major recordkeepers, fewer than 1% of plans hold any private real estate.
Most of the dollars sit in a few very large plans
| Plan assets | Plans holding private real estate | Private real estate dollars |
|---|---|---|
| Under $25M | 527 | $0.09B |
| $25M to $250M | 403 | $0.31B |
| $250M to $1B | 40 | $0.20B |
| Over $1B | 40 | $3.34B |
Forty plans with more than $1 billion each hold 85% of the private real estate money. Many of them built their own real-asset option and put a bank property trust, usually one of JPMorgan's commingled property trusts, or a PGIM real estate feeder fund inside it.
| How it's held | Plans | Dollars |
|---|---|---|
| Insurance pooled separate accounts | 931 | $1.57B |
| Bank collective trusts | 30 | $1.99B |
| Other partnership and fund interests | 44 | $0.37B |
Few plans picked a fund on their own
Fewer than 100 plans chose a private real estate fund on their own, rather than taking what their platform offered.
What it means for product builders
For anyone building a private real estate product for DC, the committees that said yes did it in one of two ways: through an insurer account on their recordkeeper's platform, or through a bank trust inside a daily-valued menu option such as a real-assets fund or a custom target-date fund. Either way, the wrapper did the work.
One caution on the count: about 70 of these plans hold Principal's and another insurer's "global real estate" accounts, which may hold listed real estate securities rather than private property. The private real estate count is closer to 950 without them.
This may also interest the Defined Contribution Real Estate Council and the Defined Contribution Institutional Investment Association (DCIIA).
About the data
Figures cover 401(k) plans with more than 100 participants that list their holdings on Schedule H of Form 5500, for plan year 2024, excluding multiemployer plans. Recordkeepers are inferred from Schedule C and other filing data.
For more information, email us at info@axiomaticdata.com. The DCALTA (Defined Contribution Alternatives Association) conference is November 10 in New York City.
Originally posted on LinkedIn.