In our Q3 2025 Investor Letter, we explore the powerful convergence of artificial intelligence, data center expansion, and the growing global demand for electricity. As AI adoption accelerates, data infrastructure has emerged as a key driver of both economic growth and energy consumption. Redwood Grove Capital has positioned its portfolio to benefit from this trend while maintaining a disciplined focus on valuation and climate impact. During the year, we selectively increased exposure to high-quality renewable and energy-efficiency companies, recognizing that clean power remains essential to meeting future energy needs.
Despite recent market volatility and policy uncertainty, we believe renewables remain the most cost-effective and scalable solution to meeting rising electricity demand. Extended tax incentives and favorable long-term fundamentals continue to support the sector’s growth outlook. As highlighted in the letter, clean energy technologies are well positioned to play a central role in powering both the digital and physical economies. We close with a broader reflection on climate resilience and interconnectedness—reminding us that even small, thoughtful actions can contribute to meaningful and lasting change.
