Research & Insights

What can institutional investors learn from a room full of CEOs, employee-owners, ESOP trustees, and HR professionals? Quite a lot, it turns out. In this piece, PDI Co-Founder and Executive Director Delilah Rothenberg reflects on her experience at the 2026 National Center on Employee Ownership (NCEO) annual conference in Milwaukee. The piece covers the governance parallels between ESOP firms and public companies, the importance of valuation discipline and labor protections in a potential downturn, and the structural nuances that distinguish employee ownership transactions from conventional private equity. It also makes the case that institutional investors bring expertise this community actively needs — and that there is much the investment world can learn in return.

Public companies implicitly carry two income streams — one belonging to capital (reflected in share prices) and one belonging to labor (embedded in wages and employment) — but these are valued and protected asymmetrically. Capital can diversify risk, trade its claims, and benefit from corporate governance oriented toward its interests, while labor cannot diversify, holds non-fungible skills, and lacks board representation or meaningful equity participation. Critically, reductions in labor's income stream (through job cuts, automation, or reclassification of workers) often directly increase the present value of capital's interest, meaning the system is structurally designed to transfer value from labor to capital — especially in sectors facing technological or policy-driven disruption. This makes the case for enhanced worker participation rights, both in governance and through equity ownership, particularly urgent in industries like rideshare and autonomous vehicles where the elimination of human labor is not incidental but central to the business model, and where the gains from that elimination will flow entirely to capital unless the model is changed.

In March, PDI and Ownership Capital Lab gathered institutional investors — pension funds, family offices, and wealth managers — to explore private credit as a vehicle for financing employee ownership transitions in the lower middle market. The conversation surfaced a compelling thesis: with an estimated $5 trillion in small business value set to change hands by 2035, a structurally undercapitalized market is opening up that offers downside-oriented credit discipline, ESOP tax advantages, and a mechanism for ensuring productivity gains — including from AI — are shared broadly rather than concentrated.

Mobilizing private capital is a central pillar of many governments’ affordable housing plans. But which investment approaches support affordability and climate goals - and which risk making them worse? PDI is pleased to be a co-founding member of the Taskforce on Affordable and Sustainable Housing (TASH). In this publication, we provide a preliminary assessment of the impacts that housing financialization is having on people and the planet in Europe.

In his 2026 annual letter, the head of the world's most powerful asset manager is telling shareholders — plainly — that capitalism is working, just not for enough people. Fink's solution centers on expanding access to capital markets — more people investing in stocks, more retail participation, tokenized assets in digital wallets, investment accounts seeded at birth. These are useful mechanisms, and broader market participation is better than the status quo. But there's a foundational problem with asking workers to invest more in the stock market when the stock market is partly built on not paying them enough in the first place.

It’s not easy to neatly summarise what corporate governance is ‘for’ but if you asked many people who work in and around the field the word ‘accountability’ would feature prominently. In particular, when talking about the Anglo-American model, this typically means accountability to shareholders.

Workforce representation on company boards is established in Europe, yet remains rare in the UK and US. Recent progress has stalled, revealing the fragility of arrangements relying on leadership commitment rather than institutional anchoring.

In our contribution to the NYU Abu Dhabi Transition Investment Lab's annual report, in particular on the theme "Understanding Inequality as a Systemic Risk to Financial Markets and Portfolios", our Executive Director, Delilah Rothenberg, makes the case that inequality has earned its place alongside climate and nature as a defining systemic risk of our time. Modern finance has not yet developed the analytical tools that enable diversified investors to adequately factor externalized social costs into their risk-return analysis. As a result, it's increasingly unclear whether markets can facilitate the price discovery needed to reflect the true value of human, social, and natural capital.

This article is a preview into a forthcoming report that examines how economic inequality is emerging as a systemic threat to the economy and financial markets, paralleling the recognition climate change and biodiversity loss have already received. The report will include additional analysis and citations. We are grateful to the Transition Investment Lab for their feature of this work.