It’s rare for investment conferences to erupt into rapturous applause mid-session, but impact investment folk are a rare bunch. This week around 1,200 of them convened in Paris for the largest annual gathering of its kind, hosted by PEI and the Global Impact Investing Forum (GIIN).

What stirred them was a call to arms from a familiar face. “Our money has to help achieve the purpose of creating a better world, where we share prosperity more widely and we bring social progress to those whom the generous hand of prosperity has left behind,” said Sir Ronald Cohen, known by some as the godfather of impact investing.

It is 10 years since the creation of GIIN and the impact “movement”, as it is often called, has attracted the attention of a wide cross-section of organisations. At the forum lunch buffet, you could find yourself spooning out couscous next to an Indian microfinance provider, a doctor from Texas or a portfolio manager from a giant French asset manager. Many were there to work out where what they are doing fits into this emerging ecosystem.

Impact investing feels like it is at a critical juncture. Optimism abounds, but there is also a creeping sense of frustration that a) ambitious targets remain just that: targets, and b) the discourse around impact is nebulous, high-level stuff. What is impact investing, who should be doing it and why? There are many valid answers to these questions, but they differ depending on who you ask. Definitive answers would be useful.

There is huge will among the investment community to harness the positive power of capital, but it faces challenges. One of these is definition: which funds get to wear the “impact” label? One consultant at the forum – an impact expert – said the best examples of impact investing he had seen were by KKR‘s North American industrials team. Why? Because its value creation approach involves cleaning up messy businesses, making them safer places to work and giving a large portion of the equity to the entire workforce. You could argue that any decent fund should be looking for a positive impact. Battles over the impact label may ensue.

There is also an unresolved question about tying compensation to impact metrics; no one has yet hit on the magic formula that allows carried interest to reflect non-financial gains. “By Fund II we hope to make it a factor in the carry,” said Bain Capital’s impact head Deval Patrick last year.

A dearth of data is a problem for many investors. Cambridge Associates produces an impact-focused private equity benchmark. As of its March 2018 data, it was showing a five-year pooled net return of 7.47 percent (5.13 percent over 10 years). So investors buying into this on a purely commercial basis need to have faith that the next 10 years will be different from the last.

Judging by recent fundraising activity, those faithful investors exist in enough quantity to excite several established brands in the private capital world. Hamilton Lane has started raising capital for an impact strategy, as has Partners Group. LGT, KKR, TPG and Bain Capital are all in this space, and judging by the name badges at this year’s forum, we expect to see more private equity brands getting into impact.

The problems facing impact could well be viewed as just teething problems for a budding market, rather than insurmountable. Experiments will take place, some will fail, but others will take off. It is a bit like the early days of venture capital, said Sir Ronald.

When the rapturous applause died down, I put it to Sir Ronald that he was preaching to the converted. “Well, the converted need to get going!” he responded. Amen to that.

Write to the author: toby.m@peimedia.com.