WSJ writer Jason Zweig has written a series of articles writing about the illiquidity and dangers of investing in alternative assets such as private debt, private equity and funds based on real estate, private debt or private equity. Here’s another.
This Small-Town Pension Fund Has a Warning for Millions of Retirement Savers
If you think cashing out of a private fund is easy, just ask a guy who used to manage $750 billion
By Jason Zweig, The Wall Street Journal, Nov. 7, 2025
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The U.S. Real Estate Investment Fund is an example of a private or “alternative” fund that invests not in publicly traded stocks or bonds, but in assets that generally don’t have market prices. Wall Street lobbyists and the Trump administration are pushing to make such investments much more widely available, including in 401(k) and other retirement plans…….
Many alternative investments take seven to 12 years or more to pay off, if they do. In the meantime, if you want—or need—to get some or all of your money out, you may well be stuck….
The typical alternative fund is “a roach motel,” says Auwaerter. “You come in, and then you can only get out when they liquidate an asset. And you don’t know what that price is going to be down the road, but the range is probably so wide you could drive a Mack truck through it.”
As a bond-fund manager, says Auwaerter, “When I bought illiquid stuff, I was getting a return premium for it! Here, it’s a trifecta of bad things: lower returns, higher fees and no liquidity. You’ve got to be paid for taking all those risks, and that’s absolutely not the case.”… [end quote]
