Impact Funds Since 2008: Strategy Shapes the Market

The evolution of impact investing over the past decade and a half reveals a market that increasingly mirrors private capital—while still behaving differently in key areas. Looking at global fund formation between 2008 and Q3 2025, venture capital (VC) emerges as the dominant strategy in both the broader private markets and the impact fund universe, underscoring how innovation-led approaches have become central to delivering measurable impact alongside returns.

Venture Capital Leads, But with Nuance

VC accounts for 46.8% of all private market funds raised since 2008 and 42.1% of impact funds, making it the largest strategy in both universes. This near-parity suggests that impact investing is no longer confined to niche strategies; instead, it is embedded within mainstream venture activity. Early-stage companies tackling climate, health, financial inclusion, and energy transition challenges naturally lend themselves to VC structures, where growth and experimentation are central.

Private equity (PE), while still the second-largest strategy overall, plays a slightly smaller role in impact investing. PE represents 20% of private market funds, but only 18.2% of impact funds, reflecting the fact that impact objectives are often harder to integrate at scale in traditional buyout models.

Real Assets Gain Ground in Impact

One of the most notable divergences appears in real assets (largely infrastructure in the Impact space). While real assets make up just 3.8% of total private market fund counts, they account for 19.4% of impact funds—edging out impact PE. This gap highlights growing investor interest in infrastructure-led solutions tied to energy transition, transport, utilities, and climate resilience. Many infrastructure strategies qualify as impact by design, particularly as governments and institutional allocators prioritize long-duration, real-economy assets.

Real estate, by contrast, plays a smaller role in impact than in private markets overall. Despite the clear social relevance of areas like affordable housing, real estate accounts for 6.1% of impact funds, compared with 11.6% of all private market funds. Part of this reflects structural factors: many impact-oriented real estate strategies operate through evergreen vehicles or core and core-plus funds, which are not fully captured in private drawdown fund datasets.

A Maturing Ecosystem, Yet Still Selective

Funds of funds (FoFs) remain relatively uncommon in impact investing, although their share has increased in recent years as the asset class matures. Similarly, impact secondaries are still rare (0.3% of funds) and reflect the intentional, long-term nature of impact commitments. That said, the rise of GP-led continuation vehicles, including notable closings by Stonepeak and Energy Capital Partners in 2022, signals that impact investing is gradually adopting more sophisticated private market mechanics.