The massive 2005-2021 growth in private equity was fueled by North American pension plans increasing their allocations. That market is now mature. The next wave of industry growth will come from entirely different sources: insurance companies, international LPs (especially Middle East/Asia), and the vast wealth and retail market.

To avoid the trap of raising ever-larger funds and being forced to invest, Sixth Street created 'Tao,' a $30B cross-platform vehicle. It acts as an overlay, allowing smaller, specialized funds to access large-scale capital for specific deals without distorting their individual investment strategies or mandates.

Beyond traditional energy projects, there's a growing opportunity for large-scale, long-duration capital in "social infrastructure." Mature private education platforms and hospital networks in developing markets are now predictable enough to attract lower-cost capital, creating a new asset class for multi-billion dollar impact funds.

Sir Ronald Cohen critiques the philanthropic model, arguing that relying on donations keeps charitable organizations small, underfunded, and perpetually begging for capital. This prevents them from achieving the scale needed to solve massive problems, a flaw that impact investing aims to correct by creating self-sustaining models.

To source proprietary hybrid capital deals, avoid the capital markets teams at PE firms, as their job is to minimize cost of capital. Instead, build relationships directly with individual deal partners in specific industries. This allows you to become a trusted, go-to provider for complex, time-sensitive situations where speed and certainty are valued over price.

The Ares Pathfinder funds embed philanthropy into their structure by pledging 5-10% of the firm's carried interest (promote) to charities. This model aligns financial success with social impact, has generated over $40 million, and inspired a wider "Promote Giving" movement.

CZI focuses on creating new tools for science, a 10-15 year process that's often underfunded. Instead of just giving grants, they build and operate their own institutes, physically co-locating scientists and engineers to accelerate breakthroughs in areas traditional funding misses.

The fund's core belief is that an impact lens can uncover economic returns unavailable to traditional investors. The strategy is not about sacrificing returns, but demonstrating that understanding impact benefits can directly translate into long-term economic outperformance, thereby influencing broader capital allocation.

Instead of focusing on marginal emissions cuts, companies should leverage their unique capabilities to solve hard problems. This means acting as early buyers for new green technologies or investing in R&D within their supply chains, creating new markets for the entire industry.