Reports of firms such as KKR, the Carlyle Group and Blackstone Group have stated they are developing products or, at a minimum, are making inquiries into the defined contribution market.

"We definitely would like to be part of 401(k) platforms," Michael Gaviser, a managing director responsible for individual investor products at KKR, told Bloomberg BusinessWeek recently. "We think about it every day."

It's a dramatic departure from tradition. Private equity firms usually are in the business of buying often distressed companies, fixing them and and, they hope, selling them for more.

"We are seeing interest in incorporating some of these less-liquid investments into a target-date strategy," Toni Brown, senior investment consultant with Mercer, said in confirming the trend.

(Target-date funds are the most common default option for employees joining a 401(k) plan.)

But is it all possible?? Yes, Brown said.

"Since it (the private equity investment) would be embedded in a well-diversified target-date fund, it's very unlikely there would be significant participant movement in and out of funds that would cause a problem because of their lack of liquidity. So we're seeing a lot more interest on that front."

How plan sponsors and participants feel about it will, of course, make the big difference. And there are regulatory issues, too, because private equity funds are now available only to accredited investors, people with a net worth of more than $1 million, or those earning more than $200,000 annually.

Also, the numbers might end up being too small compared to the rest of the investment spectrum. According to the 2011 Mercer U.S. Defined Contribution Survey, 38 percent of sponsors indicated that 10 percent or less of their plan assets are in target-date funds.

Moreover, the use of custom target-date options – where private equity is likely to be most comfortable – varies significantly by plan asset size. Seven percent of all plans utilize custom target-date options. For plans above $5 billion, custom construction rises by 20 percent.

Still, from a pure product and revenue-generating standpoint, the opportunities might be too tantalizing to overlook.

"They want to tap into the trillion dollars of assets sitting in DC and DB plans in this country," said Steve Dimitriou, managing partner with Mayflower Advisors in Boston and president-elect of the National Association of Plan Advisors. "They're not looking to go after an overly full space like large-cap growth, but they are looking to get into what would be called the alternative space."

Dimitriou adds that a private equity-type investment, from the standpoint of an advisor, might be attractive because of the potential returns they could bring and because they are decidedly different than the traditional investments found in a plan.

"So adding that to the portfolio would really help to mitigate some of the overall volatility because it is not correlated with the rest of the funds," he said.

Plan sponsors, he said, have already come to his firm looking for these types of investments, though only the largest and most sophisticated funds are doing so.

Risk, of course, is always present.

"The problem you get into is performance-chasing and that is a behavior that we are trying to minimize," Dimitriou said. "The plans best suited for this … are ones that use model portfolios or use custom target-date options."

Mercer's Brown has her doubts about it all – a function of the "J Curve" in private equity investment.

"The J Curve … is you put investments in at the beginning and you continue to put in investments as the organizations call for capital input. The value goes down for quite a ways until it starts going up again."

That, she said, can take a period of about seven years and that's why it would be difficult to have private equity in a 401(k) plan.

But Dimitriou said the "J Curve" problem is not necessarily a hindrance to the creation of a private equity fund for DC plans.

"If a fund is incubated properly so that you have continual revolving deal flow that's going in and out of there, (the J Curve) becomes less and less of an issue," he said.

Incubation takes time, though, so we're still talking about a longer period, between five and 10 years.

Whether that makes a difference or not remains to be seen.

A survey now under way by the Anova Group could help address a few of the many questions about this trend. Anova, a Boston-area financial services market research firm, had what will sound familiar to most in explaining why it was launching into the study – and why private equity is eyeing this market.

"There is a growing retirement readiness gap among DC plan participants, many of whom need access to higher-return investment options in order to have enough money for retirement," the firm said. "At present, there are few options for participants to benefit from the illiquidity opportunity presented by the long time horizon of a retirement plan."