ImpactAlpha LP/GP: How European pension funds learned to start worrying and embrace defense

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. This week, we have reports on global institutional investors from ImpactAlpha contributor Danielle Rossingh, based in the UK, and Lucy Ngige, reporting from Kampala, Uganda.

In this week’s newsletter:

• European pension funds warm to defense investments
• Investing in next-gen grid transmission and stability
• African pension fund commitments to African fund managers

Featured: Institutional Shift

European pension funds said ‘no’ to defense investments. Then came Ukraine… and Trump. As drones buzz Europe, pension funds are revising their investment policies to lift long-standing bans on financing defense companies and position security as a “responsible” investment. Europe’s institutional investors are adapting to a dramatically changed political landscape that started with Russia’s invasion of Ukraine, was heightened by US reluctance to protect Europe, and reached fever pitch this fall with a series of suspected Russian drone incursions in Poland, Sweden, Norway, Denmark, Germany and Belgium. Scandinavian pension funds, including Varma in Finland, KPA Pension in Sweden, and Denmark’s PFA, Danica and AkademikerPension, are leading the way by ditching long-term bans on defense stocks. “A few years ago, before Russia invaded Ukraine, there was a different view on weapons, but that has changed,” Britt Dinesen Christiansen of the industry body Insurance & Pension Denmark tells ImpactAlpha. Members of the association, which represents €400 billion ($465 billion) in assets, increasingly see defense investing as not so different from their climate commitments. “We can see that there is a societal need for expanding defense and security investments,” Christiansen says. 

• Readiness 2030. The gusher of public funding as European countries re-arm is also pushing investors towards defense. “We are in the most dangerous situation in many, many years,” Danish Prime Minister Mette Frederiksen told reporters in February as she lifted defense spending from 2.4% to 3% of GDP. In May, PFA, Denmark’s biggest pension fund, which oversees €100 billion ($116 billion) for 1.3 million retirement savers, relaxed its investment criteria for defense stocks. PFA now holds around €1 billion in aerospace and defense companies, PFA’s Rasmus Bessing said. Since 2022, PFA’s defense investments have generated returns of 371%, compared with 38% for the broad global index. PFA, like other pension funds venturing into defense, still won’t invest in cluster bombs or other controversial weapons.
  
• Proximate persuasion. When it comes to investing in defense, where you stand often depends on where you sit – in proximity to Russia. “You feel the urgency when you are close to Ukraine, the Baltic Sea and Russia,” Bessing says. In contrast, Italy’s Previndai pension fund, which oversees €15 billion, has made “no changes” to its strategic asset allocation in response to Europe’s rearmament plan. Very few Dutch pension funds, which manage a combined €1.77 trillion ($2 trillion), have adjusted their investment strategies since the Ukraine invasion. Last year, then-Defense Minister Kajsa Ollongren accused pension funds of being “part of the problem” by not investing enough in the country’s defense sector. “Pension funds don’t buy bullets, so it all must start with a long-term investment plan for the defense industry from the government,” Edith Maat of the Dutch pension federation Pensioenfederatie shot back on national television.
  
• Dual-use. Versatile technologies that can be applied to civilian use as well as defense offer a safer space for investors grappling with the ethics and optics of defense investing. Dutch pension fund PME committed €40 million to a high-tech defense fund managed by Keen Venture Partners that focuses on innovative European startups developing advanced drone software, battery technology and radar detection. Keen this week closed the fund at more than €150 million. “These are dual-use technologies that can be used for both defense and civilian purposes,” a PME spokesman told ImpactAlpha. In London, VentureESG has set up a “dual use working group” of LPs and GPs to consider the questions of what is a weapon, what is a war, and how to manage risks. “These are all big questions,” the group’s Susan Winterberg and Johannes Lenhard wrote in a July guest post. “Responsible investors need to step up and take their seats at the table in answering them. The future of war, peace, and technological progress for generations to come depends on it.”
  
• Keep reading, “European pension funds said ‘no’ to defense investments. Then came Ukraine… and Trump,” by Danielle Rossingh.

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Dealflow: Electrify Everything

Temasek backs Amperesand’s next-gen power infrastructure. Surging electricity demand is exposing the limits of outdated grid infrastructure. Backlogs for legacy equipment such as power transformers are opening the door for next-generation grid technologies and investment. With $80 million in Series A funding, Amperesand, a spin-out from Singapore’s Nanyang Technological University, plans to deploy its medium-voltage solid-state transformer next year. Amperesand stands to deliver “faster, more efficient and more sustainable access to energy” for data centers, said Young Sohn of Walden Catalyst Ventures, which led the financing round with Temasek. 

• Commercial pilots. Amperesand’s transformers also reduce installation labor needed and accelerate 10-fold an energy system’s “time to power.” Amperesand, which has operations in San Francisco, Reno, Nevada, and Singapore, expects to deliver its first commercial units early next year to the Port of Singapore, followed by pilots with AI hyperscalers. Existing investors, including Xora Innovation, Material Impact, TDK Ventures and Foothill Ventures, re-upped in the round, alongside new investors Industry Ventures, Acclimate Ventures and SG Growth Capital.
  
• Share this post.

TPG Rise Climate buys Pike to modernize US electricity grids. Pike Corp. has been a workhorse of the US energy transition. As utilities deal with growing power demand, aging lines and the rush to connect solar and battery projects, Pike carries out the day-to-day work of building and maintaining the grid. Crews from the Mount Airy, NC–based contractor install and repair power lines, connect renewable projects, and restore electricity after storms, which are growing more frequent and severe. TPG Rise Climate acquired a majority stake in Pike as part of its expanding climate infrastructure strategy. Canadian pension giant CDPQ took a minority stake. The transaction values Pike at more than $5 billion, according to data provider Octus.

• TPG’s climate expansion. TPG has raised $6.2 billion toward an $8 billion to $10 billion target for its second TPG Rise Climate fund, launched in late 2023. Alongside Rise Climate, TPG also runs the Transition Infrastructure strategy, which backs large-scale infrastructure tied to clean power and electrification. Together, those climate strategies have deployed roughly $2.3 billion this year. “When you look at the trends going on around in the world in terms of the demand for power on a global basis, electrification, co-location opportunity, storage, etc., we’re seeing really interesting opportunities,” TPG’s Jon Winkelried said on the firm’s Q3 earnings call. Earlier this month, TPG invested in electric-bus operator Kinetic; another portfolio company, electric-aircraft developer Beta Technologies, raised $1 billion in an IPO that valued the company at more than $7 billion.

• More.

Dealflow overflow. Investment news crossing our desks:

• New Catalyst Strategic Partners, backed by Apollo Global, was formed last year to provide seed and growth capital to emerging and diverse managers, announced a strategic partnership with New York-based healthcare private equity firm Ironleaf Capital. (New Catalyst)
  
• Denver-based Endolith raised $13.5 million to use microbes and AI to extract copper and other critical minerals from low-grade ore for data centers, EVs and military systems. (Endolith)
  
• House Rx secured $55 million in a Series B round led by New Enterprise Associates and Town Hall Ventures to make specialty medications more accessible and affordable for patients. (House Rx)

Signals: Pathways to Growth

African pension funds level up their commitments to small business finance. In East Africa, a group of pension funds agreed to launch a joint fund to invest in local small business, private equity and venture capital funds. In West Africa, pension funds are championing a minimum allocation for such alternative assets. The push from Africa’s institutional retirement plans to increase their capital allocations to homegrown businesses and fund managers is a remarkable turnabout. Most of the $700 billion or so in African pension assets under management is invested in listed government bonds; less than 1% goes to private equity or venture capital. “It’s a good starting point, because at least the pension funds are putting their trust into alternative funds,” commented Patrick Herrmann of AfricInvest, a pan-African multi-asset investment firm. African pension funds represent about 20% of investments so far in AfricInvest’s latest fund. “There’s much more capital that can be mobilized in that area,” he told ImpactAlpha on the sidelines of the All Africa Pension Summit, hosted this month in Kampala by the National Social Security Fund, a Ugandan pension fund manager.

• Advocating for alternatives. “Knowing what we know about entrepreneurship and its potential to create employment, why have we not gone the extra mile to promote venture capital as a catalyst of growth in Africa?” writes Patrick Ayota of NSSF Uganda in a new primer for pension funds on venture investing, which it launched with women-led VC firm First Circle Capital at the summit (watch ImpactAlpha’s video interview with Ayota. NSSF sees alternatives as key to its own growth strategy: supporting local growing businesses in Uganda creates local jobs and new retirement savers. It has invested in more than 430 early-stage businesses and ventures in the past five years through its Hi-innovator program. Those companies have in turn brought NSSF Uganda more than 2,000 new members and contributions of two billion Ugandan shillings (about $550,000).
  
• Following foreign capital. African investors remain reluctant to anchor private equity and other alternative asset funds. Kampala-based Pearl Capital Partners, which invests in businesses in the agriculture sector, secured NSSF as an investor in its €20 million Yield Uganda Investment Fund. That commitment came only after Pearl secured a €10 million anchor investment from the EU’s International Fund for Agricultural Development. Local fund managers recognize that overseas development finance will continue to play a crucial role in Africa’s local fund ecosystem, but engaging local investors is seen as the more sustainable long-term option. Said Pearl’s Edward Isingoma Matsiko, “We can’t continue relying on grants and donations.”
  
• Keep reading, “African pension funds level up their commitments to small business finance,” by Lucy Ngige.

Agents of Impact: Follow the Talent

Social Finance adds Gisele de Araújo, former financial analyst at the San Francisco Public Utilities Commission, as an impact investment associate… Stephanie Rupp, US SIF’s board chair and partner at Veris Wealth Partners, joins One World Investments’ advisory council… Kapor Center welcomes Chike Aguh, previously with Harvard’s Project on Workforce, as head of innovation and strategy.

Stone Alliance Group is hiring a senior vice president of impact investing… Stray Works seeks a senior ecosystem and impact manager in New York… Also in New York, Advantage Capital Management has an opening for a renewable energy analyst, and Coach is on the hunt for a sustainability manager… The Natural Resources Defense Council is looking for a housing and energy finance advisor in Washington, DC… Kiva is hiring an impact analyst.

Impact Cubed is recruiting an investment analyst in London… Also in the UK, the Green Finance Institute seeks a senior associate for carbon and nature markets… The Business Development Bank of Canada has an opening for a partner for its Thrive Venture Fund… Arabella Advisors, a philanthropic advisory firm, is shutting down. Sunflower Services, a public B Corp., will acquire Arabella’s fiscal sponsorship servicing business. 

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

Thank you for your impact!

– Nov. 19, 2025