New Private Markets: Inequality is on the agenda – what now?

Rising inequality is officially on the private markets agenda. The first question is whether institutional investors – and private markets investors specifically – are genuinely motivated to address it. To quote Delilah Rothenberg, co-founder and executive director of the Predistribution Initiative, writing in the non-profit’s latest newsletter: “We often hear a common misperception: ‘Isn’t inequality good for investors?’”

It is not. For large asset owners with long time horizons and diversified portfolios, the systemic risk posed by rising inequality is material. “Large universal owner investors understand how this contributes to system instability,” wrote Robert Eccles, who chairs KKR’s sustainability advisory group, back in 2022.

If the will to tackle the issue is growing, then the second question is whether investors have the tools to do so. Increasingly they do. The nascent Task Force on Inequality-related Financial Disclosures (TIFD) could do for inequality what TCFD has done for climate, encouraging investors to report comprehensively on their inequality-related risks.