Impact space - bubble or AUM balloon with no carry

All

Long time reader, rare poster. Using burner. Currently in the space mentioned below, but due to concerns about how attractive it will be to for realising carry in the future (vs just building AUM), I am considering finding a firm with a different focus.

What is your perspective on the impact space and the attractiveness of the field going forward?

From what I see, there is a lot of capital being raised, sometimes by less experienced or disciplined GPs which leads to crazy valuations for quality assets. This is further challenged by the need for measuring impact (CO2 reduction or equivalent), which means the assets that are high quality and provides high impact, are getting chased to even higher valuations.

At the same time, the difference between VC, GE and more mature PE is getting more blurry, which means different risk/reward profiles are chasing the same opportunities and driving up valuations. This seems to create the biggest issues for the GE space, where many players are making (small) minority investments in assets that even at decent scale has not proved to be economically viable.

The regulatory/political backdrop also seems to be worsening in the current economic outlook. This seems to have intensified as a few larger blow ups are becoming public (more to come). 

Finally, it seems that a lot of assets has a mix of characteristics from infra (need for long term patient capital etc) and VC (unproven at scale or unproven unit economics) are being funded by firms positioning as PE/GE, when in reality the risk reward profile warrants a totally different portfolio construction. Add in the regulatory risk for some of these and it seems risky. The same kind of schizophrenia seems to be present other places as well, like “product as a service” businesses that rents out products on a subscription basis and are getting SaaS revenue valuation multiples.

Clearly, a lot of positives exists as well. Less senior people in the space creates white space for building a career and profile. Working in an area that has a positive impact on the world has some value to it as well. However, if you are in the game for the opportunity to realise carry in the medium to long term: is this the place to be?