ImpactAlpha LP/GP: Impact LPs seek to demonstrate ‘leadership potential’ in volatile times

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.

☎️ Today’s Call: Municipal impact investing for shared prosperity. Innovative strategies are helping small cities and rural jurisdictions tap municipal bonds and integrate impact investments into public finance strategies. On this Agents of Impact Call we’ll explore strategies to reverse entrenched patterns of disinvestment and help municipalities, bond banks and other authorities to grow their resource base. Join Lourdes Germán of Public Finance Initiative, Michael Gaughan of the Vermont Bond Bank, Damon Burns of Finance New Orleans, Eric Glass of Clarion Call Capital and Brian Boland of Delta Fund, for this week’s Call, Wednesday, Dec. 17, at 10am PT / 1pm ET / 6pm London. RSVP for login details.

• Background reading: “Can philanthropic bond guarantees expand access to capital for smaller cities and rural areas,” by Dennis Price.

In this week’s newsletter:

• Impact LPs on what they’re looking for in 2026
• Holdcos and other creative solutions to the liquidity drought in private equity
• Galvanize’s decarbonization strategy in public equities
• KKR’s co-investments in sustainable infrastructure 

Featured: Looking Ahead to 2026

In volatile times, some impact investors try to show LP means ‘leadership potential.’ While others are beating a retreat from climate and diversity commitments, some family offices, pension funds, foundations and other asset owners are standing firm. Some are dumping asset managers that abdicate their corporate stewardship duties (looking at you, BlackRock). Some are sticking with diversity initiatives and raising climate ambitions. Some are catalyzing local capital to replace disappearing development assistance. And some are declaring their purpose as “impact first.” “People working from the allocator’s seat have the power to reset, to reframe, to suggest what risks are worth taking and which discomforts worth enduring in order to continuously improve and push for better outcomes for all,” said Margot Kane of the Philadelphia-based family office Spring Point Partners, which supports emerging and first-time fund managers investing in underrepresented founders, with an emphasis on community and employee ownership. To take the pulse of the market as we head into a new year, we reached out to more than a dozen foundations, family offices and institutional investors about their allocations, their portfolios and their strategies.

• System-level investing. Runaway global warming and biodiversity loss. Debt crises and wealth inequality. Microbial resistance and pandemics. Disinformation and runaway AI. Many small, as well as large, investors are seeing themselves as long-term, “universal owners” who must be attuned to systemic risks that can crash their investment returns. “We’re exploring how LP portfolios can do more than generate impact and returns – they can shape how markets interact with public actors to create meaningful, tangible outcomes for communities,” Gary Community Ventures’ Santhosh Ramdoss told ImpactAlpha. Sierra Club Foundation’s Dan Chu said the $200 million endowment “is setting a strong example for other institutional investors by better aligning its assets with its mission and fiduciary responsibility in the face of mounting systemic risks. In June, the foundation dropped BlackRock’s Aperio unit as an asset manager, citing BlackRock’s “refusal” to address climate risks. Since then, other LPs, including Dutch pension funds PME and PFZW, have followed suit and New York City’s comptroller has recommended a similar move. “I am encouraged by how quickly interest in 100% mission-aligned investing is spreading beyond early adopters,” WES’s Smitha Das told ImpactAlpha. “Now, more than ever, we need to support the movement from an extractive model of capitalism to one that is more just, regenerative, and sustainable and where the needs of all stakeholders are considered.”
  
• Follow the money. The miserable year for fundraising served to obscure the many LPs that continued to deploy capital for impact. Among our many “LP Scans” were the more than a dozen family offices investing in impact and the more than two dozen LPs investing in nature-based climate funds around the globe. Our 10 sovereign wealth funds deploying billions into climate and infrastructure strategies included New Mexico’s $67 billion fund that is flush with proceeds of the oil and gas assets on state-owned land – and is leaning hard into renewable energy solutions that can bring jobs and development to New Mexico. “We’re risk positive. This is a time we can go forward, big time,” Bruce Brown of New Mexico’s State Investment Council said on ImpactAlpha’s Agents of Impact podcast. Impact investors likewise have a contrarian role to play as other sources of financing are withdrawn or constrained. “With global challenges growing and investors increasingly seeking ways to contribute to social, economic, and environmental solutions, impact investing should demonstrate strong growth — not just in 2026, but over the next 5 to 10 years,” MacArthur Foundation’s Debra Schwartz told ImpactAlpha. “Rising interest in catalytic capital is particularly encouraging because it deepens and extends the reach of impact investing overall.”
  
• Family matters. Among family offices, a power shift to next-gen family members is spurring increased interest in impact investment. “Impact first” has become a rallying cry for some families willing to break free of traditional “market-rate returns” expectations. “We hope to continue to see GPs and entrepreneurs and CEOs prioritize impact first and foremost and to see investors and investments that are happy to trade some of the potential financial return for more impact return,” said Alex Evangelides of the family office A to Z Impact. In Singapore, the Tsao Family Office invests in opportunities in climate action, health and education. This year, it was the first family office to join a roster of development finance institutions to stake London-based TLG Capital’s second Africa Growth Impact Fund (for background see, “From Singapore, Tsao Family Office expands the LP pool for impact strategies in Africa”). “It’s a bit of a risk,” Leslie Lim, who leads Tsao’s fixed-income portfolio, told ImpactAlpha this summer. “But it’s the type of risk the family is prepared to take given the impact focus.” In Germany, Miki Yokoyama, who co-founded the family office Aurum Impact, says she is on a mission to encourage “more family offices to become more active in impact investing, in thinking about how they can create value with the wealth that they have.”
  
• Keep reading, “In volatile times, some impact investors try to show LP means ‘leadership potential,’” by Amy Cortese and David Bank on ImpactAlpha. Catch up on all of our 2026 lookaheads. 

Impact LPs and GPs search for solutions in a tough year to raise and deploy capital. Sometimes it seemed like everyone was becoming a “holdco” in 2025. As private equity firms, sometimes reluctantly, held on to their portfolio companies for longer periods, many started to look more like permanent capital vehicles or holding companies – “holdcos” in the parlance. With Berkshire Hathaway as an appealing model, the private equity giant KKR launched its own “strategic holdings” unit at the beginning of 2024 to hold companies on its own balance sheet, as opposed to in its funds. And then there were newcomers like Nine Dean, launched with an anchor investment from the Ford Foundation, and Trimtab Impact, an “unapologetically impact first” holding company that aims to change the risk-return-impact equation for wealthy families. The long-term ownership mindset that comes with a holdco model creates a different set of value drivers. “The logical next step is increased focus on the broader elements that make people the most important asset of any company— including fair wages, quality healthcare, and strong benefits,” said Aren LeeKong of Nine Dean.

• The real business of impact. The emergence of structures like holdcos reflected the search for solutions in one of the most challenging fundraising and investing environments in a generation. Since ImpactAlpha launched LP/GP as a specialized weekly newsletter in February, we’ve explored the growing markets for GP stakes and co-investments. And we’ve charted secondaries, continuation funds and other creative exits to recoup capital (see also, “Adding a dash of guaranteed liquidity to impact funds to attract more institutional LPs”). Our guides have been some of the most experienced investors in the business, including Tom Steyer, the founder of Galvanize (and now candidate for governor of California), who said his firm is scooping up climate deals as other investors shy away, and former New York City pension investment chief Steven Meier, who shared how he commands “early bird” and “big bird” discounts on fees from GPs. Johanna Riess, who co-heads the impact practice at Apollo Global Management, told us, “We’re setting out to grow the company’s impact and grow the investors’ capital, and so finding companies where that is mutually reinforcing is absolutely essential.” 

• First-time and emerging managers. Small fund sizes and thin track records have long kept first- and second-time fund managers on the margins of institutional capital. Yet these same funds are often where the most specialized and inventive strategies take shape — from worker ownership to diverse founders to gender and climate strategies. “Today’s scrappy managers who gut it through a prolonged down cycle, outside of over-hyped markets, are going to be more resilient investors in the long term,” says Spring Point’s Kane. “They are more likely to have high clarity of thesis and conviction, and to invest in real companies that produce impactful products and services for real people.” Other investors are taking ownership stakes in the managers themselves rather than just investing in their funds. Capricorn and TPG Next buy minority positions in sub-$1 billion new managers with deep domain expertise. This gives them a share of the management fees those firms earn, plus upside as they scale over time (see “Asset managers are scooping up ‘GP stakes’ in impact funds”). To address operational constraints, Community Capital Management and Mission Driven Finance this year created Bold Line Capital, which provides credit lines that bridge the timing gap between when a fund needs to deploy capital and when limited partners wire the money.
  
• Keep reading, “Impact LPs and GPs search for solutions in a tough year to raise and deploy capital,” by Amy Cortese and Erik Stein on ImpactAlpha. Much more on ImpactAlpha’s LP/GP. 

Dealflow: Public Equities

Russell Family Foundation backs Galvanize’s energy transition fund. The foundation, based in Washington state, invested $1.3 million in San Francisco-based Galvanize’s decarbonization-focused public equities fund. Galvanize Global Equities is focused on publicly traded companies in the clean energy transition, electrification and supply-chain sustainability. The four-year-old investment firm founded by Tom Steyer also has climate strategies in real estate, private credit, and venture capital. The Russell Family Foundation said it is the first private foundation to back the asset manager’s public equities strategy.

• Climate resilience. The foundation also awarded $540,000 in grants to 20 organizations bolstering climate policy, renewable energy access and community resilience. Grantees include the Affiliated Tribes of Northwest Indians, which is working on energy planning in 57 tribal governments; shareholder advocacy group As You Sow; and VertueLab, which supports and funds climate tech entrepreneurs to scale equitable solutions in the Pacific Northwest. The grants come out of the Russell Family Foundation’s Catalytic Climate Finance program. “Grants are a powerful companion to [the foundation’s] investments, working alongside them in alignment with the program’s principles of collaboration and promoting community resilience,” said TRFF’s Kathleen Simpson.
  
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KKR and HASI add another $1 billion to sustainable infrastructure co-investment strategy. Private equity giant KKR and Hannon Armstrong Sustainable Infrastructure Capital launched CarbonCount Holdings with $1 billion each last May to co-invest in sustainable infrastructure in the US. The private equity firms are now investing another $500 million each to continue supporting “long-term, flexible capital to high-quality sustainable infrastructure projects,” said KKR’s Cecilio Velasco. With leverage, the initiative has the capacity to invest $5 billion by early 2027. The partners’ fresh capital injection “reflects the strong momentum we are seeing across the strategic partnership and our conviction in the opportunity set ahead,” said Velasco.

• Energy transition. CarbonCount has made close to $3 billion in investments since it was launched last year. The tally factors in capital that has been returned and reinvested in new projects. HASI, which manages the strategy, targets utility-scale solar, energy storage and onshore wind, as well as distributed solar and storage, renewable natural gas and energy efficiency investments.
  
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Dealflow overflow. Investment news crossing our desks:

• Chicago-based private equity firm GTCR Partners is teaming with Ownership Works on employee ownership initiatives at companies in GTCR’s portfolio (see ImpactAlpha’s Q&A with Ownership Works’ Pete Stavros). (GTCR)
  
• Funds managed by CBRE Investment Management acquired Charlotte-based ClearGen Holdings, which has a portfolio of 250 distributed energy infrastructure projects in 12 US states. (CBRE)
  
• Transition VC closed its oversubscribed debut fund at ₹700 crore ($84 million), nearly doubling its ₹400 target ($48 million), to back energy transition and deep-tech startups in India and the Global South. (Business Standard)

Agents of Impact: Follow the Talent

Tailwater Capital promotes Doug Prieto and Drew Winston to partner… Emily Bertsche becomes managing director of private markets at the Kresge Foundation… Rewrite Capital Advisors seeks a design and implementation project leader… Town Hall Ventures is hiring a growth platform and communications lead… Self-Help is looking for an investor relations intern… Capital Impact Partners has an opening for a portfolio loan associate.

The New York State Insurance Fund is on the hunt for a sustainable investing manager… Kiva seeks an investment manager for social enterprises… The ImPact is recruiting a program coordinator… The Grunin Center for Law and Social Entrepreneurship at NYU School of Law, with the support of White & Case, is conducting a survey focused on the resolution of disputes in the impact investment sector. The survey will be open through December 31, and results will be published in 2026.

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

Thank you for your impact!

– Dec. 17, 2025