In Conversation with Convergence, Episode 47: George Evans and Nikki Pirrello of Pensions & Investments Discuss Policy Uncertainty and Private Credit

Who is Nikki Pirrello, and how did she come to Pensions & Investments?

George Evans welcomes listeners to the 47th episode of In Conversation with Convergence, a monthly podcast featuring clients and special guests. He introduces Nikki Pirrello, president and publisher of Pensions & Investments (P&I), who says she has been there for almost 18 years.

Pirrello says her path was non-traditional. She grew up and went to school in the Midwest, always wanted to move to New York to work in publishing, and a couple of years after college rented a truck and moved. She says her first publishing job was at Scholastic during the Harry Potter years, followed by Lebhar-Friedman, a business-to-business publisher focused on restaurant, retail, and pharmaceutical. She says she came to P&I about 18 years ago, recruited by then-publisher Chris Battaglia to grow the global conference business, and that she knew nothing about pensions or investing at first and did not expect a career there but has grown to love the industry.

What is Pensions & Investments?

Pirrello says P&I is part of Crain Communications, a 100% family-owned publisher that is nearly 110 years old and is now run by the family's third generation. She says P&I was established within the group in 1973, aligned with the passage of ERISA. She describes it as a publication for the institutional investing market, serving institutional investors and the global asset managers who serve them, covering defined benefit (DB) and defined contribution (DC) pension funds, endowments, foundations, and sovereign wealth funds.

Pirrello says P&I has a multi-channel approach: dedicated daily news coverage from an editorial team of about 30, which she says is rare for a specialized business-to-business publication; in-depth special reports built on proprietary data it has collected in many cases for more than 50 years on the largest US retirement plans, asset managers, and consultants; a research and data center; a monthly print edition the industry has asked it to keep; a website and newsletters; and 12 to 15 conferences and webinars a year in the US, Canada, and Europe. Evans says he still reads the hard copy and starts his day with P&I online, and says long time-series data like P&I's has enabled Convergence to do AI, algorithms, and predictive work.

How does Pirrello describe the start of 2025?

Evans asks about a start to the year with heavy politics and market volatility. Pirrello says political unknowns in Washington are driving market volatility and that unpredictability across the legal and regulatory landscape makes it hard for investors to make decisions. She says allocators across the spectrum find it hard to make major changes to portfolios and asset allocation, and that DC plan sponsors specifically feel stuck because litigation concerns drive so many of their decisions. She says some of P&I's top content this year has covered regulatory and policy developments after the change in administration, including at the SEC and at the Department of Labor (DOL) and the Employee Benefits Security Administration (EBSA).

Pirrello says many allocators are in wait-and-see mode: those with changes already in place may proceed, but she does not think many are making major changes. She sees exceptions among endowments and foundations, where she says political backlash involving universities is leading some big institutions to think differently about their portfolios, possibly holding a higher cash allocation because of uncertainty about government funding.

What did they say about the SEC and the regulatory outlook?

Evans asks whether she hears anything more definitive about the SEC's direction in 2025 and 2026. Pirrello says it is still too early: people assume the direction is toward deregulation and a lighter regulatory environment, but it is hard to see how that will play out while nominees and approvals for leading roles are still being finalized and some of the people are not well known, so there is a lot of speculation. Evans says 2024 may have had the biggest SEC agenda people had seen, with about 50 different engagements and rules, and that people no longer have a firm punch list for the SEC's agenda.

What did Pirrello say about ESG and DEI?

Pirrello says P&I is seeing strong reader engagement on both topics. On ESG, she says most of P&I's investors and asset managers are global, and that the US now differs from Europe, Canada, and Australia, whose large institutional markets view ESG differently, which creates challenges for people with global portfolios. She says some big public funds such as CalPERS continue to say that climate risk and ESG factors are hugely important, while many major asset managers are pulling back on ESG and leaving investor-led climate coalitions such as the Net Zero Asset Managers initiative and Climate Action 100. She calls it a strange balancing act and says that, from what she has seen, people are changing the nomenclature more than their approach to evaluating risk and managing portfolios.

On DEI, Pirrello says it is still early and she does not have a sense of what it will mean over the long term. She says that after an initial period of quiet, many big firms are quickly stating that they are changing their DEI approach, in many cases including the titles of DEI-related roles. She says that, personally, she has been a bit surprised by the reactions given research she cites that diversity of viewpoints across investment teams typically leads to better outcomes, and that the reactions seem to come more from a qualitative than a quantitative lens. Evans says the common theme of the conversation so far is uncertainty.

What did Pirrello say about retirement and wealth convergence?

Evans asks about convergence between retirement and wealth. Pirrello says she hears the terms convergence and coopetition almost daily, describing how retirement, wealth, and recordkeeping businesses are coming together and what that means for the future of the DC ecosystem, and that it is evolving faster than usual in a market not known for moving quickly. She says it is driven in part by the silver tsunami: the 401(k) market is slated to grow significantly over the next five years after tremendous growth in the past five, partly due to state mandates to expand DC plan coverage, and she says 2024 was a record-breaking year for retirement in the US, with about 11,000 Americans a day turning 65 and about 4.1 million a year poised to do so through 2027, the largest surge of retirement-age Americans in history.

Pirrello says SECURE 2.0 may have accelerated the trend by letting DC plan sponsors and their partners implement a broader set of services, with more sponsors talking about student debt, emergency savings, how health savings accounts work with 401(k)s, and a more holistic view of financial well-being. She says the distinction between workplace retirement savings and personal wealth is blurring, and that record keepers, DC plan sponsors, retirement plan advisers, and wealth advisers are figuring out their lanes. Evans says he did not realize the number was about 4 million a year and that it may explain why so many articles ask what will happen to Social Security.

What did they say about private credit?

Evans says the pace of private credit expansion is nothing like he has seen, and that Convergence's work on fund launches and new capital shows private equity and private credit activity running through the roof. Pirrello says P&I covers private credit heavily and sees great reader engagement, with allocators increasing their allocations and learning more about the different strategies. She says that basically every asset manager seems to be building or buying a private credit operation, that it has been one of the fastest growing areas of the financial system over the past 15 years since the global financial crisis, and that Moody's estimates it could be a $3 trillion market by 2028.

Pirrello says P&I's head of research and data told her that US public DB plans have loaded up on private credit and infrastructure over about 10 years, and that private credit investments within public DB plans have grown by almost $170 billion since 2016. She cites factors including sources of capital seeking different ways to provide lines of credit since the financial crisis, institutional demand, some retail products, and major insurers diversifying into private credit. She does not see the trend slowing in the next several years and says institutional allocators are now much more sophisticated about the different flavors of private credit. Evans says it has been a boom for the whole ecosystem, including law firms and fund administrators, and is far from a passing fad.

How do they see alternatives entering 401(k) plans?

Evans asks about the democratization of private assets and putting alternatives in 401(k)s. Pirrello says it is inevitable that alternatives will be integrated into DC plans and that some structures are already being put together and will come to market soon. She says the research and the people she talks to agree it is necessary, because there are many more private companies than public ones and access to the S&P 500 and public markets no longer offers the diversification it once did.

Pirrello says she expects alternatives to arrive mainly as part of a multi-asset portfolio, such as a managed account or a target date fund, rather than as standalone allocations for people building their own portfolios, because there is a lot of risk in that. She says packaging alternatives that way creates smoothing, fewer concerns about illiquidity, and a chance to capture an illiquidity premium, and that target date assets of about $3.5 trillion make it a natural place to start, similar to some retail structures being built now.

Evans says some of the biggest alternative managers are off to the races and raises investor protection. Pirrello says that is the huge concern: these are complicated products and structures that most lay investors, in DC plans or retail, do not understand, so a protected structure such as a sleeve within a target date fund is likely the right approach. She says it is a wait-and-see question whether they can deliver the outperformance that justifies including them, that this is one reason alternatives have not been integrated into DC plans before, that only a few have dipped their toes in, and that litigation issues are real.

Which P&I research figures did Pirrello share?

Figures stated in Episode 47, March 2025

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