ImpactAlpha LP / GP

Mixed signals for diverse and emerging managers from TPG NEXT

ImpactAlpha · April 22, 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:

  • TPG NEXT ekes out another $65 million to stake emerging managers
  • Attracting LPs to India’s climate tech opportunities
  • New York Common steers $2.4 billion more to climate GPs
  • Asset allocators want to see ‘impact track records’ 

Lackluster fundraising for TPG NEXT sends mixed signals to emerging and diverse managers. When TPG raised $500 million from the California Public Employees Retirement System for its TPG NEXT fund two years ago, the asset manager’s CEO Jon Winkelried touted the effort to “bring financial and operational capital support to diverse-led firms.” It subsequently disclosed plans for a whole line of “NEXT” investment vehicles, including an equity fund and a fund of funds focused on emerging managers. With TPG NEXT raising only $64.5 million in additional capital from about a dozen investors over the past 24 months, TPG didn’t even issue a press release, and a TPG spokesperson declined to comment. The fundraise was disclosed in an SEC filing last week. Institutional investors, led by US public pension funds, still want access to emerging managers with fresh investment theses that could deliver overlooked alpha; just don’t call them diverse or underrepresented. TPG’s website now refers to “next generation managers.”

  • Continued commitment. If fund managers are treading carefully, some of their LPs are full steam ahead. For its part, CalPERS continues to tout DEI at recent presentations. The $500 billion pension fund committed $2 billion to emerging managers and $6.3 billion to diverse managers in the 2023-24 fiscal year. At the same time as its TPG NEXT commitment, CalPERS committed $500 million to GCM Grosvenor’s Elevate Fund, which in January closed at $800 million. The Elevate fund makes seed investments in small and emerging private equity firms, including Tony Miller’s Excolere Equity Partners and Jo Natauri’s Invidia Capital Management. CalPERS and its sister fund, the California State Teachers Retirement System, or CalSTRS, are hosting an Emerging and Diverse Investment Manager Forum in May in Sacramento. Research suggests diverse investment teams outperform their less-diverse counterparts, unlocking differentiated deal flow and enhanced portfolio diversification. “Throughout our portfolio, investment firms owned by people of color and women are among our best performing managers,” New York City Comptroller Brad Lander said in a recent update.
  • Keep reading, “Lackluster fundraising for TPG NEXT sends mixed signals to emerging and diverse managers,” by Roodgally Senatus and Amy Cortese on ImpactAlpha.

Dealflow: The Liist 

Attracting LPs to India’s climate tech opportunities. Theia Ventures in Bangalore is an early stage climate tech VC firm that invests in new technologies for hard-to-abate sectors like transportation, industry and materials. Founder Priya Shah started the firm to direct her family’s wealth toward solutions to the climate crisis. The firm has since secured backing from other family offices in India and institutional investors toward its $25 million goal. “They’re excited to have a window into technologies that can be applied to and utilized by their industries,” Shah told ImpactAlpha (see, “Catalytic investors look to India’s huge market for outsized climate impact”). The strategy is among the new additions to ImpactAlpha’s Liist, a searchable database of impact fund managers and investment strategies. Also new to the Liist:

  • Liquidity windows. Copenhagen-based Nordic Impact Funds is a women-led impact fund manager focused on underserved communities in Africa. Its Nordic Impact Evergreen fund invests in East Africa’s small business sector, focusing on agri-businesses that are supporting climate resilience and adaptation for farmers, women, refugees, and low-income and rural populations. Nordic Impact Funds has raised $7 million from Nordic high net-worth individuals and family offices; the fund is also open to larger institutional investors and development finance institutions. Nordic Impact Funds has built in regular liquidity windows to allow investors to enter and exit the fund.
  • Low minimums. In New England, Capital for Change’s Social Impact Investment community loan fund has raised $7.5 million to provide low-cost debt to businesses and individuals for housing or clean energy (see, “Five promising pages in the playbook for shared prosperity”). The fund is open to both accredited and non-accredited investors, who can invest as little as $1,000 for a period of one to 10 years and earn up to 4% interest. “It’s a practical way to help their neighbors and communities and promote economic justice,” according to Capital for Change. Separately, Vermont-based Flexible Capital Fund, a community development financial institution, has invested $9 million in 24 companies in growth-stage companies in New England supporting sustainable food, agriculture and forestry and clean tech and is warehousing a dozen more deals (see, “Fund managers deepen and broaden impact strategies for underserved communities“). 

New York state pension fund directs $2.4 billion to three new climate investments. The New York State Common Retirement Fund steered $2.4 billion to three climate funds as part of its Sustainable Investments and Climate Solutions strategy. The new investments bring its total committed to the strategy to $26.5 billion toward a goal of $40 billion by 2035. “Climate change poses a real threat to our investments,” State Comptroller Thomas DiNapoli said. He said the new commitments position New York Common “to address those risks and seize on opportunities generated as the world transitions to a low-carbon economy.” 

  • Sustainable infrastructure. Oaktree Capital Management got $250 million form the pension fund for its seventh Oaktree Power Opportunities Fund, which invests in electric power, water, wastewater and other energy and utility-related businesses in North America. Vision Ridge Partners received a $150 million investment to its fourth Sustainable Asset Fund IV, which invests in real assets in energy, transportation, and agriculture that can help mitigate and adapt to climate change. The fund also invests primarily in North America. New York Common also committed $2 billion to the FTSE Russell TPI 1000 Climate Transition Index, a global index fund that weights companies’ carbon emissions, fossil fuel exposure, and revenues from “green” products and services. The new investment follows a $2 billion investment in the index in 2021. As US markets tank in the face of economic policy uncertainty, global markets have been gaining.
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Dealflow overflow. Investment news crossing our desks:

  • Yale University plans to sell $6 billion in private equity holdings, or about 15% of its $41 billion endowment fund,  on the secondary market (see, “Restive LPs look to secondaries and creative exits to recoup capital”). The move comes as the Trump administration threatens to cut funding and tax exemptions for Ivy League universities, and amid a broader embrace of secondary sales by limited partners looking for liquidity. (Secondaries Investor)
  • Buenos Aires-based Alina VC launched its first fund with a goal of raising $10 million to invest in startups addressing the future of work in Latin America. (Alina VC)
  • Keppel, a Singapore-based asset manager, secured $2 billion from pension funds, insurance companies, sovereign wealth funds and other investors across three of its funds, including one focused on sustainable urban development. (Reuters)

Impact Voices: Impact Management

Allocators are looking for ‘impact track records’ to align fund investments with strategic bets. Surdna Foundation’s Don Chen wound up his talk at the GIIN’s West Coast Forum in San Francisco last week with two lessons. The fiercest was his call for investor solidarity in the face of “baseless attacks” on diversity, equity and inclusion, or DEI. “We know what generates excellent financial returns, we know that considering external factors helps us manage systemic risk, and we know how to make socially beneficial investments to foster a more just and sustainable world,” Chen said. His other lesson: We need better tools “to more concretely understand the relationship between impact investing and social impact on the ground.” That tracks with the findings of the impact verification firm BlueMark, which analyzed how dozens of allocators approach manager research, screening and scoring, as well as available toolkits. In a guest post on ImpactAlpha, BlueMark’s Paige Nicol reports on one of the most common items on allocators’ wish lists: better ways to evaluate whether a fund is focused on meaningful indicators and setting appropriately ambitious goals. “Our hypothesis is that ‘impact track record’ is not regularly factored into allocator decision making – not due to lack of interest, but because the necessary tools do not yet exist in the market.” 

  • Common criteria. A streamlined way to assess “the basics” of impact performance would allow asset allocators to direct their attention to their unique strategic priorities, Nicol writes. She suggests impact allocators harmonize their due diligence by borrowing from efforts such as the due diligence questionnaire from the Institutional Limited Partners Association. “Greater alignment would enhance comparability across peer funds,” Nicol says. BlueMark’s fund impact rating tool, Fund ID, draws on industry standards and principles, she says (disclosure: ImpactAlpha is partnering with BlueMark to display Fund ID ratings and seals across our collection of fund databases). FundID has rated more than 50 funds, including funds from Singapore-based Temasek Trust, Tokyo-based GLIN Impact Capital, and The Vistria Group in Chicago. Among those disclosing their platinum seals are BlueOrchard’s Green Earth Impact Fund, Cross Border’s Women’s and Children’s Health Technology Fund, Quona Capital’s third fund, and Sweef Capital’s first fund.
  • Outperformance. Chen pointed to the “Social & Environmental Equity Investing Framework,” developed by Cambridge Associates’ Chavon Sutton with Surdna’s data, which maps investments to economic, social and environmental benefits in people’s everyday lives. The foundation learned that diversity programs “help improve the quality of candidates, the quality and the strength of new hires, and also enable teams to think more creatively, to think out of the box, to avoid group-think blind spots,” Chen said last week. “We formed a hypothesis and we asked ourselves, ‘Maybe this is an opportunity to make money.’” Surdna has raised its allocations to diverse-owned firms from about 15% to 36% of its endowment. Surdna has also backed more than two dozen first-time fund managers, who are “proving out our thesis that talent is overlooked in capital markets.” For a decade, the foundation’s now $220 million mission-related portfolio has returned 11.4% annual returns, equalling or outperforming the rest of the portfolio. 

Agents of Impact: Follow the Talent

At Apollo Global, Jay Clayton, former SEC chief in the first Trump administration, will step down from his role as chair and lead independent director to become interim US Attorney for the Southern District of New York. Gary Cohn, former Goldman Sachs chief operating officer and chief economic advisor to Trump, will join the board as lead independent director. Apollo CEO Marc Rowan will take on the additional role of chair of the board. 

Rebalance Capital adds Salesforce’s Paula Goldman as an advisory board member… Congruent Ventures welcomes Gray Robinson as a partner… Techstars alumni Daniel Smith and Mita Carriman launch the Caribbean Venture Collective to support startup founders with ties to the Caribbean… Anthropic is on the hunt for an education and economic mobility lead in San Francisco… Also in San Francisco, Schmidt Family Foundation has an opening for an impact investing portfolio manager.

Rockefeller Foundation seeks a senior associate in New York for its energy-related initiatives… Ford Foundation and Omidyar Network are requesting proposals for research and programs focused on the relationship between responsible technology practices and financial performance (see, “Responsible AI is top of mind for big institutional LPs”)… Sorenson Impact Institute is hosting, “Democratizing American prosperity: Unlocking economic opportunity for all,” with Jim Sorenson, Impact Evaluation Lab’s Terrence Keeley and Anthony Bugg-Levine, today at 12pm PT / 3pm ET.

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

Thank you for your impact!

– April 22, 2025