The Investment Integration Project (TIIP) defines system-level investing as the intentional consideration by investors of the bigger-picture environmental, social, or financial system context of their security selection and portfolio construction decisions. The financial community relies on these systems for profitable investment opportunities and to maintain stable business operations and functioning financial markets.

First coined by Robert Monks and Nell Minow, “universal ownership” suggests that certain institutional investors have reached such size and scale that they own every industry, asset class, and geography in their portfolios, thereby owning the market, which is a reflection of the economy. As Jon Lukomnik and Jim Hawley note in their book, Moving Beyond Modern Portfolio Theory: Investing That Matters, the health of the overall market and economy affect an investor’s returns more than security selection or portfolio construction. If an individual investment results in negative externalities to the economy, and therefore the market, even if that produces a near-term return for that individual investment, it may not be in the interest of the investor’s portfolios.

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Helping Investors Align Their Internal Investment Practices With Long-term Sustainability

The Predistribution Initiative (PDI) is working with institutional investors and their stakeholders to co-create investment structures and practices that better address systemic risks.

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Institutional investors are increasingly concerned about systemic risks—including climate change, inequality, and biodiversity loss—which manifest as systematic risks in financial markets and in investors’ portfolios. Investors need to address these risks head-on to protect their returns and to ensure a sustainable and equitable future for all.


PDI supports investors in co-creating new approaches that align their internal investment governance and financial analysis practices with the principles of system-level investing, Universal Ownership and intergenerational fiduciary duty.


The Investment Integration Project (TIIP) defines system-level investing as the intentional consideration by investors of the bigger-picture environmental, social, or financial system context of their security selection and portfolio construction decisions. The financial community relies on these systems for profitable investment opportunities and to maintain stable business operations and functioning financial markets.

First coined by Robert Monks and Nell Minow, “universal ownership” suggests that certain institutional investors have reached such size and scale that they own every industry, asset class, and geography in their portfolios, thereby owning the market, which is a reflection of the economy. As Jon Lukomnik and Jim Hawley note in their book, Moving Beyond Modern Portfolio Theory: Investing That Matters, the health of the overall market and economy affect an investor’s returns more than security selection or portfolio construction. If an individual investment results in negative externalities to the economy, and therefore the market, even if that produces a near-term return for that individual investment, it may not be in the interest of the investor’s portfolios.

How We Do This

We specifically focus on four overlapping and complementary workstreams.

Click on a puzzle piece to learn more about each workstream

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Improve standard setting & disclosure
We work with investors and their stakeholders to create a shared understanding of how investors can reduce their contributions to systemic risks and inequality-related risks and enhance positive impacts.
The TIFD Project: As part of TIFD’s Interim Secretariat, PDI is working to co-create metrics and frameworks for inequality-related risks.
Investor Contribution 2.0 Project: Together with Impact Frontiers, PDI is developing guidance that would enable investors to improve their internal governance, financial analysis, investment structuring, and asset allocation practices.
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Improve internal governance practices
Given that making shifts at large institutions requires a tone from the top and structural policy adjustments, investment governance is a key starting point for tangible change. Adjustments to the investment belief statement, investment policy statement, and other policies and procedures which flow from these standards can support an institution in fully aligning with the principles of Universal Ownership and systematic stewardship.

We are actively working with industry leaders — The Investment Integration Project (TIIP), Jon Lukomnik of Sinclair Capital, and Keith Johnson of Global Investor Collaboration Services — to develop investment governance guidance that enables institutional investors to adjust their practices.

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Improve internal financial practices
We work with investors and their stakeholders to create a shared understanding of how investors can reduce their contributions to systemic risks and inequality-related risks and enhance positive impacts.

In partnership with the Responsible Asset Allocator Initiative (RAAI) and Paul O’Brien (a Trustee of Wyoming’s retirement system and former Deputy Chief Investment Officer of the Abu Dhabi Investment Authority), PDI is collaborating with institutional asset owners and allocators to integrate consideration of externalities into financial analysis and asset allocation.

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Highlight regenerative investment structures and the risks of consolidated capital flows
A key finding of PDI’s flagship ESG 2.0 working paper is that institutional investors are consolidating their investments with the largest fund managers and companies, which squeezes out opportunities for emerging fund managers and small and medium-sized enterprises (SMEs) while also contributing to procyclical market behavior that can lead to asset bubbles and credit crises. Investors have responded well to our proposals that more regenerative investment structures are needed and that they need to deconsolidate capital flows, but seek more examples of “what good looks like” and how to access these opportunities. Our efforts aim to not only document what models currently exist, but how they can scale with integrity to meet the allocation needs of institutional investors, as well as what practical opportunities exist for institutional investors to adjust their allocation practices.
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Workstream #1

Improve standard setting & disclosure

Workstream #2

Improve internal governance practices

Workstream #3

Improve internal financial practices

Workstream #4

Highlight regenerative investment structures and the risks of consolidated capital flows

“Reimagining Investment Structures”

“Reimagining Investment Structures” is a series of animated videos about the need to improve investment structures so that investors can align their internal investment governance and financial analysis practices with the principles of system-level investing and Universal Ownership. Part one focuses on the issue of inequality and how workers have lost economic power due to the “labor squeeze.” Part two focuses on risks relating to existing investment structures, such as leveraged buyout strategies used by some private equity firms. Part three looks at the role that investors—particularly Universal Owners—can play in building a better financial system by taking into account issues like fund manager compensation, financial engineering, and tax structures.

Part 1 — The Labor Squeeze: How Workers Are Losing Economic Power

Part 2 — The Potential for More Sustainable & Regenerative Investment Structures
Part 3 — Structuring Finance to Work for All Stakeholders

PDI in the News

Buyouts: Private equity could fall afoul of Florida’s new ESG investment ban
ESG and impact investing organizations are taking note as America's fourth biggest pension system acts against the movement.
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Next City: Former Wall Street Pro Says to Tackle Inequality, Start With Changing Wall Street
The Predistribution Initiative is devoted to reducing inequality by changing the basic business practices of Wall Street. What will it take for it to succeed? Delilah Rothenberg has obsessed over inequality since her college years at NYU, where she studied neo-colonialism and neo-imperialism as a triple major in history, politics and African Studies [...] Rothenberg quit her private equity job in 2018 to co-found The Predistribution Initiative, devoted to reducing inequality by changing the basic business practices of Wall Street. “It’s complex and it’s not something you can show a picture of in real life like a hungry child or a vulnerable woman,” Rothenberg says.
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New Private Markets: Why tax is creeping up the ESG agenda

Predistribution Initiative, a US-based non-profit organisation supporting financial industry reform, is helping to launch the framework to help reduce “systemic risks to the health of the overall economy”, Delilah Rothenberg, the group’s executive director, told New Private Markets in an interview in January.

TIFD is not expected to launch for a few years. In the meantime, Rothenberg said more work is needed to better understand which practices are fair or foul.

“The industry needs to think about how the funds of private equity managers are structured and whether those funds are structured to avoid paying taxes,” she said. “Where do you draw the line between taxefficiency and irresponsible tax practices?”

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Research and Insights

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