ImpactAlpha LP / GP

ImpactAlpha LP/GP: Donald Trump, green degrowther?

ImpactAlpha · April 8, 2025

Greetings, Agents of Impact! 

Welcome to this week’s ImpactAlpha LP/GP, where we take you inside the real business of impact investing and the dynamic relationships between owners, managers and intermediaries of impact capital.

In this week’s newsletter:

  • Tariff fallout – and silver linings
  • Space-based solar power
  • Decarbonizing grids with digital twins 
  • Big climate investors plan to boost climate allocations

Could trade chaos cut emissions and make impact investments the safer bet? Donald Trump, green degrowther? The president’s draconian tariff regime has crashed global financial markets and dramatically increased the chances of a recession (unless, as BlackRock’s Larry Fink says, we’re already in one). But if the dark clouds have a silver lining, it may be that the sudden global contraction could reduce greenhouse gas emissions, as did the Great Financial Crisis of 2008 and the Covid-19 shutdown of 2020. Could Trump, who famously called climate change a hoax, have a secret plan to cut carbon and steer the planet away from the three degrees Celsius trajectory we’re currently on? That may sound fantastical, but perhaps no more so than the administration’s stated policy rationales for the steep tariffs, which are drawing widespread condemnation even from Trump allies. If Trump stands firm on tariffs, “it could send us into a period, at least temporarily, of degrowth,” says Green Alpha Investments’ Garvin Jabusch. But emissions have historically bounced back when the economy recovers.

  • Tariffied investors. No one wants a recession, especially a self-inflicted one. But the extreme uncertainty is already putting the brakes on projects, investments and the first stirrings of a thawing IPO market. Publicly traded PE firms such as KKR, Apollo and TPG have lost as much as a third of their value since the start of the year. Large institutional investors are looking to shed their stakes in illiquid private equity funds, the Financial Times reported. A trade war “could chill or limit business opportunities” and “adversely affect the revenues and profitability of portfolio companies,” KKR warned in December. The levies landed particularly hard on clean tech companies. Solar panels, geothermal drilling gear, and electrical grid transformers are all in the crosshairs. “The full tariff list reads like a climate tech supply chain map,” wrote CTCV, which put together a handy chart detailing the clean tech impacts. The irony, of course is that Trump’s purported goals – the reshoring of critical supply chains, abundant energy, high-quality jobs and lower energy bills – were all being helped along by historic federal investment under the Biden administration. “It’s almost like we’re running the playbook designed to hand China global leadership,” says Jabusch.
  • Uncorrelated assets. “When it becomes obvious in these moments that legacy strategies are risky and volatile, the opportunity cost to invest in impact assets uncorrelated to public equities becomes lower,” says longtime impact investor Antony Bugg-Levine. He says an African agricultural fund that returns, say, 10%, or a deposit in a US community bank that pays 4% annual interest, “suddenly looks better in comparison to the cratering equities market.” Big pension funds, foundations, endowments and insurance companies, including in Europe, are “taking their foot off the gas, but they’re not going anywhere,” says Jason Scott of Spring Lane Capital, a project equity investor for sustainable infrastructure (see below). “There is a lot of dry powder and there are a lot of great investment opportunities,” he says. “I do think there are enough mission-driven investors, especially in the energy transition, but also in these other impact areas, to keep the ball rolling.” 

Dealflow: Space Tech

Aetherflux lands $50 million to deliver space-based solar power. The California-based startup, launched by Baiju Bhatt, former co-CEO of the trading site Robinhood, is seeking to capture space’s abundant solar energy for energy-poor locations. Aetherflux is developing a constellation of small satellites that can transmit solar power to ground substations with infrared lasers. Its technology is an improvement over microwave-based transmission, which requires larger ground stations, Bhatt explained in a blog post. Aetherflux hopes to bring power to remote islands and disaster areas, and also military bases. The company secured $50 million from Interlagos, Index Ventures, Breakthrough Energy Ventures, Andreessen Horowitz, New Enterprise Associates and several angel investors to launch a demonstration satellite next year.

  • Solar system. “Making space solar power a reality won’t be easy,” acknowledged Bhatt. But technological progress means “launch costs are lower, lasers and optics are cheaper and more efficient and constellation management is better understood.” Aetherflux was approved – by the Trump administration – for a grant by the Department of Defense’s Operational Energy Capability Improvement Fund to develop a proof of concept. A spokesperson for Aetherflux did not confirm to ImpactAlpha whether the funding has been disbursed.

Gradyent snags €28 million to create ‘digital twins’ of heating and cooling systems. Gradyent, based in the Netherlands, creates digital replicas of heating and cooling systems in three dozen European cities. The “digital twins” help energy providers lower carbon emissions and simulate failures. Gradyent “makes it possible to analyze concrete scenarios, optimize supply versus demand, identify bottlenecks, and study the embedding of new assets,” said Timo Aaltonen of Helen, a Finnish energy company that manages one of Europe’s largest district heating systems. Helen has reported a 40% drop in carbon emissions from heat production since it started using the digital twin software. Gradyent partnered with Shell in October to create a digital replica of a steam grid in Rotterdam that processes 772 tons of steam per hour.

  • Low-carbon heating. Swiss impact investor Blue Earth Capital led Gradyent’s oversubscribed $30.7 million Series B funding round. It was joined by Belgium-based Capricorn Partners, Energiiq, Eneco, Helen Ventures and others. “Energy companies are replacing CO2-emitting heating units with diverse electrified assets, heat sources and storage solutions, making optimization more complex than ever before,” said Mikko Huumo of SEB Greentech Venture Capital, which also participated in the round.
  • Check it out.

Dealflow overflow. Investment news crossing our desks:

  • The Public Investment Corp., which manages South Africa’s Government Employees Pension Fund, invested $40 million in three of Africa50’s infrastructure development initiatives. (Africa50)
  • Novo Holdings invested in Sylvan, a KKR-backed company, to make fungi-based crop treatments to replace synthetic chemicals. (KKR)

Impact Voices: Climate Finance

With $1.5 trillion in assets, private investors plan to boost climate allocations. Even before Trump’s tariffs scrambled markets, shifting policies in the US and EU were creating uncertainty for climate investors. But at least one group of investors is playing the long game. A survey last month by Dalberg of nearly three dozen climate investors with a collective $1.5 trillion in assets under management found that most planned to increase their climate allocations in the next two years, or at least hold steady. “Rather than pulling back, many private investors are stepping up, adjusting their approaches to capitalize on new opportunities,” write Dalberg’s Kusi Hornberger and Nadia Ralston. They expect their peers and the broader industry to decrease climate-focused impact investing, however.

  • Bright spots. Investors are shifting where they direct their capital in light of public policy shifts. They expect to increase investments in green materials, manufacturing and renewables over the next two years. The pullback from venture capital and private equity means climate tech could attract less capital, respondents said. Shifting policy priorities and market uncertainties mean emerging markets may be the beneficiaries of a capital flight from the US and Europe. Investors expect to target more climate opportunities in Asia, and to hold steady in Latin America, the Caribbean and Africa. There is also growing momentum for nature-based and adaptation solutions in underserved regions.
  • Blended finance. Layered capital stacks can be complex and time-consuming to assemble, but climate investors surveyed by Dalberg see blended finance as “highly effective at mobilizing additional resources” and expect to see more blended climate deals in the coming years, write Hornberger and Ralston. “Many investors are optimistic about how blended finance structures are opening new avenues to mobilize capital and support the growth of climate-positive enterprises that can withstand future shocks.”
  • Keep reading, “With $1.5 trillion in assets, private investors plan to boost climate allocations,” by Dalberg’s Kusi Hornberger and Nadia Ralston on ImpactAlpha. 

Agents of Impact: Follow the Talent

Izzy Schmidt, previously with Beyond Capital Ventures, joins Quona Capital as investor relations and ESG associate… LISC’s Kalamazoo, Mich. office adds Jackie Koney, former development and operations director of Salzburg Global Seminar, as executive director… Alleviate Impact Capital welcomes Bhoomika Gupta, an MBA candidate at Duke University Fuqua School of Business, as a strategy consultant… Surdna Foundation promotes Bria Graham to senior program associate of its Inclusive Economies grant program.

FinDev Canada seeks a credit and investment risk manager in Montreal… Adeso is hiring a managing director for its Sudan-focused investment fund… Social Finance has an opening for an impact investment director… The City of Boston is recruiting a renewable energy and finance manager… Barclays is looking for a responsible investment analyst in London… Accion is on the hunt for an impact measurement and management intern.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– April 8, 2025