Research & Insights

Inside a conversation with institutional investors on employee ownership and private credit

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.