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As we pass the halfway mark of 2025, the energy transition landscape has undergone significant transformation. US policy shifts under President Trump – including the One Big Beautiful Bill Act (OBBB), executive orders supporting nuclear and clean energy, and broader deregulation – have reshaped global energy dynamics. These developments, alongside evolving global trade relationships and heightened energy security concerns, mark a potential inflection point for the energy transition space, which we believe creates opportunity for our multi-strategy platform, particularly within our Energy Transition book.

Ryan Kuker, portfolio manager for our Energy Transition sub-strategy, outlines the key developments driving our current positioning: accelerating power demand, the revival of nuclear power, the resurgence of US natural gas, and structural pressures on renewable energy capacity growth that may lead to electricity price inflation. 

Figure 1: Estimated global data center capacity demand, ‘continued momentum’ scenario, gigawatts

Source: Gartner reports; IDC reports; Nvidia capital markets reports; McKinsey Data Center Demand Model

President Trump and the Department of Energy have renewed their focus on restoring US energy independence and utilizing existing resources. In this context, relaxed environmental regulations and accelerated energy infrastructure development are likely to benefit companies exposed to US natural gas. As a dispatchable and well-understood energy source, natural gas is increasingly attractive to data centers, which may rely on advanced combined cycle gas turbine plants for baseload power or use gas peaking plants alongside other power sources. Even if the majority of natural gas-fired electricity generation does not flow directly to data centers, we expect natural gas to remain a critical component in grid reliability – especially if nuclear capacity becomes tied up in long-term data center contracts – given its status as the largest source of electricity in the US.

While we expect continued efforts to expand existing power capacity and retire coal-fired electricity generation in the US, the timeline for restarting or building new infrastructure remains inherently long. At the same time, the aggressive phaseouts of IRA tax credits under the OBBB represents a significant setback for future renewable capacity growth – one we believe will prove very inflationary. Retail electricity prices are heavily influenced by capacity auctions, which depend on the availability of power supply. Renewables, with their relatively low capacity factors (i.e. electricity generated per unit of capacity), already contribute disproportionally to auction tightness. As the OBBB undermines the incentives to expand renewable capacity, we anticipate these auctions will become even tighter.

Additionally, there is almost insatiable demand from data center customers for nuclear power. If an unregulated nuclear facility enters a behind-the-meter co-location agreement with a data center customer, its output could be removed from the regional grid and allocated solely to that single customer, effectively reducing grid supply. In our view, removing highly reliable nuclear electricity generation from the grid is likely to exert sustained upward pressure on power prices over time.

The policy shifts, evolving legal frameworks, technological innovations, and changing consumer preferences we have seen in 2025 reinforce our conviction that the energy transition will be anything but linear. While many of the themes we track in the energy transition sector are expected to unfold over the medium to long-term, current market dynamics are creating new major winners and losers, potentially marking a critical inflection point.

Global Multi-Strategy Alpha closed July with positive performance both month-to-date and year-to-date. Continuing its strong run in 2025, Merger Arbitrage was our top-performing book for the month, followed by Healthcare, Asia Broad and China Long/Short. Credit strategies also delivered solid results, with Convertibles, Working Capital, and Investment Grade books posting positive performance. Negative performance largely came from our European Generalist book, followed by our Energy Transition and Event Driven books. 

Across sectors, we remain focused on the re-rating potential of industrials, materials, and discretionary, while continuing to embed long-term structural themes, such as energy transition, artificial intelligence, and financial innovation, into our analysis.

¹Â U.S. Energy Information Administration,