ImpactAlpha LP / GP

Raising impact funds that can weather attacks on DEI

ImpactAlpha · March 25, 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.

📞 Sharing the wealth through employee ownership. Impact lenders and investors are finding ways to simplify worker buyouts and finance transitions to employee ownership. Essential Owners Fund’s Malini Ramanarayanan Moraghan, Apis & Heritage’s Michael Brownrigg, Ownership Capital Lab’s Alison Lingane, Social Capital Partners’ Jon Shell, Lafayette Square Institute’s Jack Moriarty, and other Agents of Impact will share emerging strategies for helping workers become owners, tomorrow, March 26 at 10am PT / 1pm ET / 5pm London. RSVP today.

In this week’s newsletter:

  • Raising an impact fund in a post-DEI world
  • Impact debt strategies in the market
  • Investing in transmission infrastructure 
  • Responsible investing in responsible AI

An impact lawyer’s practical advice for raising a fund in a post-DEI world. Major law firms face the loss of their security clearances, federal contracts and clients in an escalating campaign by the White House to hamstring legal challenges to its controversial policies. Last week, the acting chair of the Equal Employment Opportunity Commission sent letters to 20 leading law firms asking for information about employment practices advancing diversity, equity and inclusion, with the intent of rooting them out. That makes all the more timely the guidance from Chintan Panchal of impact-focused law firm RPCK Rastegar Panchal LLP for impact fund managers seeking to navigate the new terrain. “The need for capital to address climate resilience, financial inclusion and underserved markets is bigger than ever,” Panchal writes in a guest post on ImpactAlpha, adding, “Diversity-focused investing remains a powerful economic strategy.” Many diversity, equity and inclusion-focused initiatives that eliminate bias, develop a broad view of diversity and promote equal opportunity remain lawful, he says. “How do you raise an impact fund that is fundable, defensible and scalable in today’s environment? The answer lies in strategy, structure and storytelling.” Panchal shared some guideposts for fund managers to consider in taking their strategies forward: 

  • Steer clear of race and quotas. Affirmative action and race-conscious policies and commercial contracts were once upheld under certain conditions. Recent legal trends suggest that any investment strategy or hiring initiative structured around racial quotas is vulnerable to challenge. Broader, race-neutral criteria, such as economic disadvantage, geographic underrepresentation, or sector-specific barriers, can help achieve diversity goals without attracting lawsuits – maybe. Legally resilient frameworks include targeting underserved communities or economically disadvantaged founders, rather than using explicitly race-based selection criteria. Census tracts identified in the Opportunity Zone Act are one example of an official designation of “distressed areas” in the US.
  • Thoughtful, intentional language. Panchal advises clients to play up the value that can be created by their impact strategies, and the value left on the table by systematically underestimating businesses in underserved markets. “By positioning the lack of diversity in capital allocation as a structural inefficiency, fund managers may be able to make a compelling case that investing in underrepresented markets is a strategy for superior risk-adjusted returns,” he says. “This may help some institutional LPs get to yes in a charged political environment where many have been directly targeted and are being closely scrutinized.”
  • Build for scrutiny. Funds managers need a solid legal foundation that can survive shifting regulations, political winds and LP priorities. Don’t give opportunistic adversaries an opening to scrutinize or challenge your strategy based on an otherwise avoidable legal or regulatory oversight, Panchal says. Make sure your documents – including your marketing materials – are airtight, and that you’re being well advised on the highly complex world of fund manager regulation. “The backlash against DEI signals a shift, not a full stop, for impact investing focused on inclusion for diverse communities,” he writes. “Capital is still flowing, but fund managers need to speak the right language, build resilient structures and execute flawlessly.”
  • Keep reading, “An impact lawyer’s practical advice for raising a fund in a post-DEI world,” by RPCK’s Chintan Panchal on ImpactAlpha.

Dealflow: Private Debt

A half-dozen new impact debt strategies on the Liist. By one estimate, there are more than a thousand private credit funds raising money this quarter. First-time and impact fund managers offering up debt strategies highlight just how wide-ranging the private credit opportunities are. The six additions to ImpactAlpha’s Liist of impact fund managers are expanding access to credit for small businesses, nature conservation and fund managers in need of bridge loans and working capital. “Over the last eight years, we have seen the demand for private debt consistently increase for impact-first companies,” the nonprofit Open Road Alliance said. It is expanding beyond short-term bridge financing to social enterprises and nonprofits into bridge loans to impact fund managers, project finance, and working capital loans. Open Road’s blended finance structure includes a five-year note; investors can choose their own interest rate (within a range) or donate their interest payments to Open Road. Impactable Investment Group in London is looking to close an initial $100 million for its blended-finance Emerging Markets Private Debt Fund, which focuses on “the most densely populated, lowest income” emerging market regions. Woman-led Chestnut Run Capital Partners in Massachusetts launched last year to lend directly to middle-market companies in the US.

  • Agribusiness debt. Fount, in the Netherlands, is in the market with its Organic Development Finance fund to lend to small organic agri-businesses in emerging markets. iGravity’s open-ended debt fund, called Balim, provides results-based financing to small agri-businesses in Africa. Jaguar Legacy Fund is a first-time fund manager looking to support sustainable agriculture, biodiversity preservation, job creation and carbon removal in Latin America’s “jaguar corridors” – the areas in between dedicated conservation sites where jaguars roam. Its fund invests in businesses that “maintain, restore and expand essential ecosystem functions while creating jobs in ecosystem services, agroforestry and sustainable supply chains.”
  • Read on, and check out dozens more fund managers in ImpactAlpha’s improved Liist database. Suggest your own Liist entries here. 

Stonepeak provides equity funding to Longview for US electric transmission infrastructure. Energy demand is booming. So is renewable energy deployment. The holdup? Transmission infrastructure to carry the clean energy from its source to homes and businesses across the country. Some 2.6 terawatts of power projects, the bulk of it wind and solar, were waiting to be connected to the US grid at the end of 2024, according to the Lawrence Berkeley National Laboratory. The country’s aging transmission infrastructure “requires a historic buildout,” said Longview Infrastructure’s Ben Summers and Eric Hayes. The St. Louis, Mo.-based firm partners with independent system operators and communities. It has teamed up with alternative investment firm Stonepeak to develop electric transmission infrastructure projects in the US. “Stonepeak’s equity commitment, deep understanding of the transmission space, and operational expertise in building platforms will enable us to effectively scale the team and meet the need in transmission head-on,” said Summers and Hayes, former LS Power and NextEra Energy executives who launched Longview last year. 

  • Green infrastructure. Rob Kupchak of Stonepeak said the undisclosed amount of equity funding will “enhance connectivity across communities” in the US. The New York-based infrastructure and real assets specialist investor, with $72 billion in assets under management, invested through its $3.2 billion Stonepeak Opportunities Fund. The fund targets middle-market infrastructure investments, including data centers, fiber networks and energy transition assets in North America and Europe. Stonepeak declined to comment on the deal and fund.
  • Share this post.

Dealflow overflow. Investment news crossing our desks:

  • Goldman Sachs’ asset management group launched a bond fund in Europe to invest in biodiversity conservation and remediation. (ESG Dive)
  • Meanwhile, Goldman’s alternatives group backed Michigan-based SkySpecs alongside Statkraft and Equinor Ventures to help the company expand monitoring and inspection of wind turbines. (FinSMES)
  • Sustainable infrastructure investor Actis took a $600 million equity stake in MTerra Solar, a solar energy developer in the Philippines with a 20-year, 850-megawatt pipeline. (Actis)
  • Peregrine Energy Solutions, which develops utility-scale renewable energy and storage projects, raised $168 million in equity and short-term debt. (Peregrine)

Impact Voices: Responsible Tech

Responsible AI is top of mind for big institutional LPs. Just as Meta, Google, OpenAI and other tech leaders push to roll back rules guiding the development of artificial intelligence, big-pocketed asset owners are moving in the opposite direction. The European Investment Fund and BPI France, as well as Omidyar Network and StepStone, are championing responsible investment in and sophisticated governance of the powerful and rapidly advancing technology. “Funding responsible technology will be key to unlocking growth and mitigating the risks associated with deploying cutting edge technology,” Suzanne Tavill of New York-based StepStone, which advises and manages $698 billion in total capital, said at last month’s Paris AI Summit. In the latest ImpactAlpha column from VentureESG, Johannes Lenhard and Oliver Nixon share insights from Paris, and perspectives on responsible AI investing from more than two dozen LPs. 

  • Corporate governance. Three of four LPs told VentureESG that they recognize specific and significant long-term investment risk in the negative externalities of data and AI technology. Institutional investors like CalSTRS, for example, are becoming more sophisticated in how they assess AI opportunities and risks, at both an enterprise and systems-level. “This is a growing focus not only for pension fund investment and stewardship teams, but for pension boards and trustees in their governance roles,” says Chris Jurgens of Omidyar Network, which last year took a stake alongside the Ford and Nathan Cummings foundations in AI upstart Anthropic. Says Jurgens, “We see responsible AI as one of the critical next frontiers in responsible investing and corporate governance.”

Agents of Impact: Follow the Talent

🔌 PluggedIn: Why LPs still see an opportunity in equitable climate tech. Climate tech continues to attract significant investment despite shifting policy priorities in Washington, DC. On the next Plugged In, Symphonic Capital’s Sydney Thomas and Shruti Shah join Sherrell Dorsey to share how the early stage VC firm identifies and supports innovative climate solutions, and why they remain committed to equity and overlooked communities. Tune in Tuesday, April 1, at 10am PT / 1pm ET/ 6pm London. RSVP now.

  • Re:Construction North Carolina. Shah will also be a featured speaker at next week’s in-person gathering, hosted by GOOD TRBL and ImpactAlpha at the Ackerman Center for Excellence in Sustainability at the University of North Carolina in Chapel Hill. The daylong event includes a screening of “Equity & ownership: Napoleon Wallace and the Reconstruction of Black wealth. Join Shah, along with Napoleon Wallace, David Bank, Anita Brown-Graham, Martin Eakes, Wilson Lester and hundreds of other Agents of Impact, Friday, April 4th. RSVP today.
  • Spring tour. ImpactAlpha’s road show continues with a free evening networking reception hosted by the Robert Wood Johnson Foundation at the Aspen Institute in Washington, DC, Tuesday, April 8 (RSVP); and a showcase program at the Boston International Film Festival, Saturday, April 12 (tickets).

Apis & Heritage, Community Health Impact Coalition, EarthEnable, Healthy Learners and Pacto pela Democracia are recipients of the 2025 Skoll Award for Social Innovation… Accion Venture Lab adds Akhil Gupta, a former Dell Foundation program manager, as a South Asia-focused investment officer… Realize Impact welcomes Topiltzin Gomez, previously head of capital strategies at Honeycomb Credit, as an impact investing research fellow.

First Australians Capital is hiring a business support administrator… British International Investment is looking for an infrastructure and climate investment associate in Singapore… San Francisco Foundation has an opening for an associate director of program-related investments… Climate-KIC is recruiting an investment innovation specialist in Brussels… Ownership Works is on the hunt for a senior associate of financial inclusion and resilience in New York… Mulago seeks an investment principal in San Francisco… Community Vision is hiring a loan closing administrator in Oakland, Calif.

Trill Impact is looking for a student buyout analyst and office assistant in Copenhagen… Green Climate Fund is on the hunt for someone to lead for one of its Africa sub-regions… Capital Impact Partners is accepting applications for its Austin Equitable Development initiative that provides training and financing to emerging real estate developers… Nia Impact Capital will host, “Investing in B Corps: Resilience in uncertain times,” tomorrow, March 26.

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

Thank you for your impact!

– March 25, 2025