Good morning. Andrew here. For the last year, I’ve been writing — and talking — about some of the risks related to a proposed federal rule that would clear the way for 401(k) plans to include alternative assets like private equity and venture capital. DealBook contributor Peter Coy looks at the implications for employers and whether they would be exposed to lawsuits. Also, DealBook’s Sarah Kessler has an insightful interview with the creator of AMC’s new Silicon Valley satire. And make sure to take our quiz. (Was this newsletter forwarded to you? Sign up here.)
A new dilemma over alternative assets in 401(k)s
Wall Street cheered when the Trump administration proposed a rule that would clear the way for 401(k) plans to include private equity, private credit, real estate and cryptocurrency. But the effort may not protect employers that add these sorts of alternative assets to their workers’ retirement plans as much as President Trump would like. Until now, retirement plans have been mainly limited to stocks and bonds because alternative assets were deemed too risky, illiquid, complex or high in fees for individual savers. Unfortunately for the deregulatory initiative’s proponents, it comes just as some alternative assets are looking dodgy. “As cracks emerge in the private credit market, private equity returns fall to 16-year lows and crypto keeps tumbling, President Trump has decided now is the time to stick all of these risky assets into Americans’ 401(k)s,” Senator Elizabeth Warren, Democrat of Massachusetts, said in a statement the day the proposed change was released. The proposed rule could put employers in a bind. If they don’t offer more alternative investments, some of their workers and retirees, and the president, will be unhappy. If an employer does offer the alternatives and they go bad, the safe harbor may not be sufficient to shield the employer from lawsuits. No immunityApollo, Blackstone, Blue Owl Capital and KKR have tried for years to make their alternative assets easier to purchase by the $12 trillion market of 401(k)s and related defined-contribution plans. They argue that diversifying into alternative assets would give workers more stable and secure retirements. They also say that because pension plans already include alternative investments, it’s only fair that workers with 401(k)s should have access to them, too. The new rule, which the Labor Department proposed on March 30, is designed to give employers the confidence to let those assets in. It tells plan sponsors to evaluate all kinds of investment products on the same six criteria: performance, fees, liquidity, valuation, benchmarking and complexity. Any plan sponsor that follows that evaluation process will be presumed by the Labor Department to have fulfilled its fiduciary duty. “Instead of allowing Washington bureaucrats to call the shots, we believe plan fiduciaries should decide which retirement investment options are best for hard-working Americans,” Secretary of Labor Lori Chavez-DeRemer said in a statement a few days after Trump’s executive order on alternative investments in August. But the rule that her department issued last month does not grant employers absolute immunity from lawsuits. Plaintiffs can still sue and win by showing that the process was flawed or the outcome was unreasonable. Employers are still required to comply with the Employee Retirement Income Security Act of 1974, known as ERISA, which sets minimum standards for health, retirement and disability plans. A lawyer representing plaintiffs is likely to argue that the proposed rule is an attempt to “water down” ERISA, said Fred Reish, an attorney specializing in retirement law. The risk that a court might side with plaintiffs has increased since a 2024 Supreme Court decision that eliminated the Chevron doctrine, which had required courts to defer to federal agencies’ interpretations of ambiguous statutes. A judge is under no obligation to treat the safe harbor as anything more than one opinion about what prudence requires. Difficult due diligenceIndividual workers lack the sophistication to evaluate private equity funds, said Barbara Roper, who directed investor protection at the Consumer Federation of America before serving as a senior adviser at the Securities and Exchange Commission under President Joseph R. Biden Jr. Worse, she said, is that most employers — which choose the menu of options — also lack that sophistication. Smaller companies that sponsor 401(k) plans typically rely on consultants for investment selection. The safe harbor’s six factors sound rigorous. But Roper argues that they will be difficult to evaluate where assets aren’t publicly traded, valuations are subjective and standardized performance benchmarks don’t exist. Roper worries that ordinary savers “will get the high-cost, lower-performing products — the ones that at best match public markets and at worst significantly underperform.” Ludovic Phalippou of Oxford’s Saïd Business School found in 2020 and again last year that, net of fees, private equity had performed roughly in line with public markets over the past two decades. Asset managers say the rule wouldn’t allow workers to bet their entire nest eggs on, say, Bitcoin. Alternative assets would be mixed in with conventional stocks and bonds. Bad timingThe managers frame their argument for alternative investments in almost moral terms. Larry Fink, the chief executive of BlackRock, wrote in his 2025 shareholder letter that more than half of Americans fear outliving their savings more than death itself. One solution, he argued, is to “unlock access” to private markets: “Assets that will define the future — data centers, ports, power grids, the world’s fastest-growing private companies — aren’t available to most investors.” Annuities — guaranteed lifetime income — are regarded as alternative investments because they’re complex insurance products, not plain-vanilla stocks and bonds. The new rule would make it easier for BlackRock to offer them by giving plan sponsors a framework to select them, reducing risk of lawsuits from investors, said Nick Nefouse, the company’s global head of retirement solutions. MFA, formerly the Managed Funds Association, argues that because alternative assets don’t move in sync with stocks and bonds, they can reduce portfolio volatility. The timing of the push couldn’t be worse. Blue Owl, one of the firms best positioned to benefit from the rule, has seen its stock fall more than two-thirds from its peak. The company recently capped the amount that investors could withdraw from two of its funds amid a surge in redemption requests. KKR has fallen almost half from its peak, and Bitcoin is down about 40 percent from its high. Comments on the rule are accepted through June 1, and a final version is expected by year’s end. But that won’t end matters. Employers will have to perform “a lot more due diligence” on the alternative investment components of plan offerings precisely because they’re more opaque, said Jerome Schlichter of Schlichter Bogard, a law firm in St. Louis, who pioneered plaintiff lawsuits over retirement plans. Ignorance, he said, is no excuse.
A fragile cease-fire with Iran hasn’t restored traffic in the Strait of Hormuz, through which a quarter of the world’s oil and natural gas exports once traveled. Gasoline prices, which follow the cost of crude oil, jumped 25 percent from February to March, the biggest monthly jump on record, according to data from the Energy Information Administration. That increase is stretching wallets: The University of Michigan’s measure of consumer sentiment hit its lowest level on record this month. U.S. inflation surged in March. The Consumer Price Index report, released on Friday, showed that the monthly measure jumped 3.3 percent from a year earlier, driven by the energy shock stemming from the war in Iran. Heightened inflation complicates the Fed’s decision over whether to raise rates. Anthropic restricted the use of its latest A.I. model. Claude Mythos Preview will be available to only a handful of companies, including Google and Cisco. The model is capable of advanced cybersecurity, inducing finding vulnerabilities in software, which the company said made it too powerful to release to the public. A Times report uncovered new clues in Bitcoin’s biggest mystery. John Carreyrou spent a year digging through thousands of decades-old internet posts in an effort to unmask the identity of Bitcoin’s pseudonymous inventor, Satoshi Nakamoto, and concluded that he is Adam Back, a British cryptography expert. Back has denied that he is the inventor. More big deals: Amazon and the Postal Service struck a new deal. SpaceX is said to have lost nearly $5 billion last year. And Bill Ackman made a $64 billion bid to buy Universal Music Group. Satire meets a new era of aspiring tech titans
“The Audacity,” a Silicon Valley satire premiering Sunday on AMC, follows Duncan, the C.E.O. of a second-tier tech company, as he scrambles to save face after a failed acquisition by a Big Tech company. But the show also takes a wide lens on the world of tech bros, including their psychiatrist, their children, their children’s school and even total outsiders (from the Department of Veterans Affairs) who try to interact with it. Jonathan Glatzer, the show’s creator, talked with DealBook’s Sarah Kessler about learning and portraying the culture of aspiring tech titans. The interview has been condensed and edited. How did you get up to speed on the culture of Silicon Valley while you were writing the show? I went up there for a little while, met with lots of people, went to Googleplex, met with an early A.I. guy. I listened to a ton of podcasts, read DealBook every day. You don’t really want to become too much of an expert, especially in satire — you still want to be on the outside looking in. What did you peg as the essential qualities of the culture? It is striking how everyone sort of dresses alike and how they even seem to talk alike. It really is a bit of an echo chamber. And there are things that I think are deserving of scrutiny that are not being scrutinized there because of that groupthink, which is rewarded with tremendous amounts of profit as well. “Succession,” which you worked on as a writer and producer, famously nailed the aesthetic of its world, which was dubbed “quiet luxury.” Is there a tech world version of that? There was an evolution from the earlier, more heady days, when they were going to change the world for the better, and therefore they were not going to wear Armani suits. They were going to wear hoodies, even if we’re walking into a big billion-dollar corporation to make a deal. That started to look a little cliché. As more and more money has come in, you have some of these titans with stylists saying, “You need to be wearing a T-shirt that costs $3,000.” I guess leather jackets are kind of the new uniform amongst the tech bros. In the middle of Season 1, Duncan, our main character, “devests from wearing vests” and looks more like an F1 racer after that. The danger of personal data collection is one of the central themes of the show. Is that something that entered your radar through the interviews? A phrase that came about maybe 10 years ago — if you get a product from Silicon Valley for free, you are the product — always stuck with me. I didn’t want the show to be obsolete by the time it came out a year and a half or two years after I was writing it, so I was asking people in Silicon Valley whether that would be evergreen. And everyone across the board said yes, that’s not going away. At the end of the season, Duncan challenges the more traditional Silicon Valley entity and says: You know when women are menstruating, you know when to sell them sweatpants, you know when to sell them stilettos. It’s a very crass way of putting it, but it’s very true. I think that that’s something that we just haven’t quite reckoned with, because the convenience that we get from these products and this technology is so alluring. Like any compromise that is made in life, it is from time to time a good idea to step back and scrutinize what we’re giving up in the bargain. The first reviews have started to come out. Is there anything you think they’re consistently getting wrong about your intentions? Either that these are despicable people or we didn’t hit hard enough. To me the smartest reactions have been about how we are depicting the existential concerns of these human beings. They’re not just punching bags for me. You have to have some affection for your characters, find their humanity, even if you are writing people who are engaged in venal activity. And how people respond to that, I think, tells you something about what they want to see, what they want perhaps highlighted in their own culture, in their own echo-spheres. And that’s fine. I just don’t think it’s a very complete reading of our intentions. Quiz: A.I. feelingsThis question comes from a recent Times article. Click an answer to see if you’re right. (The link will be free.) About half of Gen Z-ers living in the United States say they use generative artificial intelligence daily or weekly, according to a Gallup survey released on Thursday. How many said they felt hopeful about the technology? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Thanks for reading! We’ll see you Monday. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
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