You Couldn't Invest in PE Before. That Might Have Been Protecting You. StepStone Private Markets bought 34 investments on December 31, 2025, and recorded a 15% gain the same day. Same day. One of those positions, a stake in Odyssey Investment Partners Fund VI, was marked up 34% at purchase. Another StepStone fund paid $538,100 for a venture capital stake and marked it up 16x to $8.7 million. This is how private equity accounting works. And Washington is rewriting the rules so your 401(k) can participate. The INVEST Act passed the House. Trump signed an executive order to "democratize" access to alternative assets for retirement plans. The SEC dropped its longstanding cap on registered funds investing in private funds. The Equal Opportunity for All Investors Act would let anyone who passes a test qualify as accredited, regardless of net worth. PE has historically returned 13.1% annually over 25 years versus 8.6% for the S&P 500, according to Cambridge Associates. Both numbers are net of fees. The S&P includes dividends. Apples to apples? Except PE returns are measured using IRR, internal rate of return. The S&P uses time-weighted returns. Cambridge Associates itself says direct comparison between the two "is not recommended." IRR is sensitive to when capital gets called and when it gets sent back. A fund that times those flows well looks better on paper than the actual dollars earned. Cambridge publishes adjusted comparisons that correct for this, and PE still outperforms in some periods. But the gap shrinks. Recently, it vanishes. From 1990 to 2010, PE outperformed the S&P by 6.3% annually. From 2022 to September 2025, PE returned 5.8% annualized while the S&P returned 11.6%. That's partly a function of the strongest public market run in years. Snapshot, not verdict. But the spread has been narrowing for over a decade. PE funds also mark their own assets. No market quotes. Subjective pricing models. When they buy stakes in other PE funds, accounting rules let them adopt the other manager's stated value. CalPERS has $103 billion in PE. They value those holdings using NAVs from the managers themselves. When the scorekeeper and the player are the same person, what does the score actually tell you? The co-founder of Apollo said the retail push "is not going to end well." The founder of Olympus Partners called the fee layering in retail PE products a "scheme" whose projected returns are unlikely to beat an index fund. When PE insiders are warning you about PE, and the performance numbers rest on self-reported valuations and a measurement methodology the data providers say you shouldn't use for the comparison, the question isn't whether you should get access. It's: access to what, exactly? https://lnkd.in/ekZbkMd6