Principal, Constitution Capital Dip into Private Market CITs

Two financial service firms recently announced the launch of collective investment trusts designed to provide retirement plan participants with additional access to private-market investments.

Constitutional Capital Partners, an alternative asset manager, launched today the Constitution Capital Horizon CIT, a CIT intended to provide defined contribution plan participants with access to private equity investments.

Horizon launched with more than $50 million in assets from 18 different retirement plans, with near-term commitments bringing total assets to more than $1 billion, according to the firm’s announcement.

The CIT is designed to be incorporated into professionally managed products and services, including target-date funds, managed accounts and other multi-manager structures. The new CIT provides private equity exposure through a diversified multi-manager approach across primary fund investments and direct equity co-investments. In addition, a liquidity sleeve is meant to support participant transactions and plan cash flows.

“Access [to private markets] is important, but what’s really more important is that exposure be diversified across private equity managers, sectors and vintages rather than concentrated in any particular single fund or investment,” says Dan Cahill, Constitution Capital’s CEO. “We designed our Horizon fund specifically for daily pricing, liquidity and operational needs for the defined contribution market.”

SEI Trust Co., a subsidiary of SEI Investments Co., is the trustee for the Horizon trust. At launch, the CIT will be available to eligible DC plans that use Principal Financial Group’s Principal 401(k) recordkeeping platform.

Meanwhile, Principal took another step toward providing participants with access to alternative investments. On August 26, the firm announced the expansion of the Principal Featured Partner program into private markets.

The Featured Partner program launched nearly three years ago with an initial focus on supporting public market strategies within retirement plans, says Brett Fisher, the assistant vice president of investment product strategy at Principal. PGIM, the asset management business of Prudential Financial Inc.; Franklin Templeton Inc.; and Principal Asset Management, the global investment management business for Principal Financial, were—and continue to be—the three public market strategy partners, he says.

The private market managers participating in the expanded program include the initial three public partners, in addition to AllianceBernstein L.P., Apollo Global Management Inc., Ares Management Corp., Blackstone Inc., Blue Owl Capital Inc., the Carlyle Group, Goldman Sachs Asset Management L.P., KKR & Co., Morgan Stanley Investment Management, Neuberger Berman and Partners Group.

According to Principal’s announcement, the partner program is designed to help participating investment managers develop collective investment trust-based solutions that combine public and private market exposures. Through the program, investment managers can use Principal services, products and recordkeeping services to support CIT-based target-date and target-risk funds, managed account services and other asset allocation services.

Fisher says the new CIT series is under construction and expected to be released in the first quarter of 2027. Wilshire serves as a subadviser and will determine which CIT strategies and managers pair best together.

Constitution Capital and Principal are far from the only asset managers using CITs to bring private markets to DC plans, especially since the Department of Labor in March issued its proposed rule clarifying how fiduciaries may evaluate alternative investments for use in DC plans.

Earlier this month, SEI Investments Co. and WTW Investments, a division of WTW, announced a partnership to develop private market funds available through collective investment trusts. In June, Voya launched two multi-manager alternative CITs for DC plans. PGIM in May launched a private credit CIT.

As of March, CITs held $8.3 trillion in assets in the DC market, up from $6.1 trillion as of September 2024, according to data from ISS Market Intelligence, which, like PLANSPONSOR, is owned by ISS STOXX.