Impact Growth Capital Newsletter

Skip the Applause Lines. Here's What Actually Moves Capital.

Impact Growth Capital
February 25, 2026

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This week at IGC:
Every State of the Union is part policy, part performance. We're not here to grade the speech. We're here to identify the signals that affect how capital should be positioned over the next 12–24 months. Below are the three things from this week's address that matter to investors and what we're watching as a result.

Three Signals That Move Capital

Signal 01

The Tariff-to-Tax Swap Direction Matters More Than Feasibility

The President reiterated that tariff revenue could eventually replace income taxes. Whether that's realistic isn't the point. What matters is the policy direction: this administration is committed to protectionism, domestic production, and reshoring. That trajectory doesn't require legislation to move markets it just requires consistency, and we're seeing it.

Tailwinds

Industrial policy, domestic manufacturing, energy independence, supply-chain reshoring

Watch Closely

Global trade disruption, import-cost inflation, export-dependent sector exposure

Signal 02

Geopolitical Risk Is Becoming an Asset Pricing Variable

The address placed heavy emphasis on military strength and preventing nuclear proliferation particularly regarding Iran. For allocators, the takeaway is structural: the national security premium is rising, and it's repricing how capital evaluates jurisdiction, sector, and asset class. Capital is migrating toward stable jurisdictions, defense-adjacent infrastructure, and real assets with intrinsic, tangible value.

Signal 03

Affordability Is Still the Pressure Point And It Drives Policy

Regardless of the optimistic framing, public frustration with cost of living remains the dominant political issue. This is the variable that forces the hand on interest rates, housing regulation, and wage policy. For investors in real assets particularly workforce housing this isn't a problem. It's structural demand confirmation. Affordable housing isn't a social cause in this environment. It's an investment thesis backed by political inevitability.

Reading Between the Lines

Gridlock Is the Feature, Not the Bug

Congress remains deeply divided. That means sweeping legislation is unlikely. For private capital, this is actually favorable when governments can't act, markets set the terms. Regulatory surprises go down. Predictability goes up.

Capital Preservation

Downside protection outperforms speculative positioning when policy direction is loud but execution is slow.

Hard Assets Over Narratives

Real assets with cash flow and intrinsic value outperform story-driven trades during political volatility.

Private Markets Advantage

Public market noise increases. Private capital benefits from longer hold periods and reduced sentiment exposure.

Essential Demand Thesis

Assets tied to human needs housing, infrastructure don't need favorable headlines to perform.

Key Takeaways for Capital Allocators:

We Don't Predict Politics. We Position for Structural Shifts.

The macro environment continues to validate our thesis: when headlines get louder, disciplined capital gets quieter and more selective. We remain focused on the assets and structures that perform regardless of who's at the podium.

Cash-flowing workforce housing
Essential infrastructure via P3s
Tax-efficient structures for HNWIs
Long-duration, downside-first underwriting

The Bigger Picture

What This Means Going Forward

The speech confirmed a global trend that's been building for years: leadership narratives are replacing policy roadmaps. For investors, this recalibrates where volatility comes from and where stability actually lives.

→Volatility will be driven by perception as much as fundamentals

→Capital flows will follow stability, not headlines

→Real assets tied to essential human needs become strategic hedges

Bottom Line

The political cycle rewards spectacle. The capital cycle rewards discipline. We stay focused on the latter deploying patient capital into essential infrastructure where demand is structural and returns don't depend on applause lines.

Jesse Sells
Founder | Impact Growth Capital

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