What started last year as a trickle of private equity impact funds coming to market could now be considered a deluge.

KKR made headlines in February with the launch of the KKR Global Impact Fund. The following month Partners Group came to market with PG LIFE, a cross-asset fund targeting private equity, real estate, debt and infrastructure, for which it will seek $1 billion. Hamilton Lane had raised $7.5 million for its debut impact fund as of 2 October.

LGT Lightstone – formerly LGT Impact – snapped up Aureos founder and former Abraaj managing partner Sev Vettivetpillai as chief executive of the newly formed unit earlier this year. TPG is seeking up to $3.5 billion for The Rise Fund II, which would make it one of the few to have successive funds dedicated to the strategy.

One trend to look out for in 2019 is the emergence of permanent capital impact funds. Long-standing impact firms ResponsAbility Investments – which targets regions such as Latin America, Africa and South-East Asia – and Bridges Fund Management are already in market with evergreen vehicles for the strategy.

The concept is winning over critics. As impact-cynic Stephen Moseley, head of private equity and special opportunities at Alaska Permanent Fund Corporation, tells PEI: “Private equity firms are long-term investors, but they have to sell their portfolio companies eventually. And for that reason there could be an incentive to make the wrong choice, to sweep radioactive waste under the rug, and to move on.

“Permanent vehicles should have an even greater incentive to make the right decisions on ESG matters.”

November saw around 1,200 impact investing enthusiasts descend upon the Global Impact Investing Forum in Paris – the largest annual gathering of its kind.

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.

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.

– Toby Mitchenall contributed to this report.