Bethnal Green Ventures has been bought by socially conscious asset manager Connected Asset Management.
The progressive VC will however remain an independent brand as it scales its technology-for-good investment strategy.
Both sides believe the tie-up provides an opportunity to meet growing demand for “impact investment” from pension funds.
Bethnal Green Ventures is one of the five most active VCs in the UK and its investments include sustainable smartphone Fairphone, patient platform DrDoctor, and Organise, the campaigning platform for better work conditions, while Connected sees itself as being at the forefront of ESG solutions for pension funds.
Darren Agombar, founder and managing director of Connected, believes the acquisition will help his workplace pension clients invest in British tech start-ups with measurable social and environmental impact.
A British Business Bank report found that if pension savers invested in high-potential start-up companies via venture capital, returns for the average 22-year-old pension saver could increase by between seven and 12 per cent and there were also potential gains for older savers, suggesting a 45-year-old with a £50,000 pot could expect to see between six and seven per cent increases.
Looking further ahead, Connected plans to offer ways for direct-contribution (DC) pension providers to invest in microfinance, social housing and clean energy.
Agombar said: “Venture capital and growth equity is transforming society and building the high growth companies of the future. By bringing BGV into the Connected group, pension savers can now also benefit from the high returns that investing in these firms can offer over the longer term whilst helping to deliver positive social and environmental change.”
Paul Miller, CEO and managing partner of BGV, said: “By creating better solutions to big social and environmental challenges, tech for good businesses tap into huge market opportunities, benefitting people and the planet at scale while also making fantastic returns. More and more investors are recognising this opportunity, especially in London, which is the top global hub for tech for good with VC investments into the space increasing exponentially in recent years.”