Bridges Community Ventures is a venture capital firm with a difference. While the giant buyout groups like Permira and Blackstone are busy dodging attacks for their lack of transparency and cosy tax breaks, Bridges has stuck to a simple mantra: private sector investment with a social mission.

Today, the firm has closed its second fund, worth £75 million, for investing only in the poorest 25 per cent of the UK.

The fund, which beat its target of £50 million, includes investments from heavyhitters such as Barclays, HSBC and Lloyds TSB as well as money from wealthy individuals including Sir Ronald Cohen, the founder of Apax, one of Britain's most successful private equity firms.

Bridges started life in 2002 when Sir Ronald brought together Philip Newborough and Michelle Giddens

Mr Newborough is an ex-Apax colleague who ran Sony in the UK before setting up his own managed office business with a £50 million fund. Michele Giddens is an expert in international development and microfinance, having worked in eastern Europe and Russia for the World Bank Group and Shore Bank, a private US bank lending to low-income areas in African American neighbourhoods.

Their mission was to invest in small companies and buyouts which made a social or environmental impact and which employed people from the local area.

Like other venture capital firms, Bridges charges a management fee to investors and its partners receive “carried interest”, their 20 per cent share of the profits after investors are repaid.

But unlike others, Bridges also runs a charitable trust which owns 30 per cent of the management company and receives 10 per cent of the carried interest to make gifts to entrepreneurs in deprived areas.

“It’s not the old paradigm of business where you maximise returns at any cost then when you feel guilty you give away some money,” says Ms Giddens.

Bridges is part of a growing wave of social entrepreneurism that is slowly starting to take hold in Britain and is gaining publicity through high-profile entrepreneurs like Sir Ronald.

While most successful businessman are content to make donations to charity, Sir Ronald has gone one step further.

He wants to use his skills developed over 30 years in private equity and venture capital, to give something back to the community.

Since retiring from Apax on his 60th birthday in 2005, Sir Ronald has spent all his time settting up companies like Bridges and working with the government to use his business skills to bring about social change.

So far Bridges has made 24 investments, sold three companies and seen five go under. Its investments now employ over 800 people, 200 of which were formerly unemployed.

Its biggest success story is SimplySwitch, a price comparison service for household bills set up in 2002 by single mother of three children Karen Darby.

Ms Darby, who left school at 16 with just one GCSE, came up with the idea of finding the cheapest gas, electricity and phone suppliers and then helping families switch from their existing suppliers free of charge. Bridges funded her to the tune of £300,000, so long as she set it up in a deprived part of London. She chose Croydon. The business was sold last year for £22 million to Daily Mail and General Trust.

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