A fund to invest in social impact bonds run by Bridges Ventures, the specialist social lender, has announced it has raised £25m, including investments from the worlds of banking and pension funds.

The Bridges Social Impact Bond Fund was launched in 2013, with Big Society Capital as a cornerstone investor, and initially attracted investment worth £14m from a number of charitable foundations.

It has today announced new investors worth another £11m. Investors in this tranche are the European Investment Fund, Great Manchester Pension Fund, Merseyside Pension Fund, Deutsche Bank, The Prince of Wales's Charitable Foundation, Trust for London and The Highwood Foundation.

Antony Ross, partner and head of social sector funds at Bridges Ventures, said his organisation had recently seen much more interest in social impact bonds from private investors. He said that banks and pension funds were a key target for social investment and that it was extremely encouraging to see them start to show interest.

“For social investment to be a success we need to raise money from a broader pool of capital,” he said. “We’re starting to do that and it’s good news. We’ve actually attracted a broader range than we initially expected.

“We could also have raised more money from some of these investors, but we had a £25m cap on the fund.”

Social impact bonds are a type of payment-by-results contract where investors provide a not-for-profit organisation with capital to carry out interventions. The government pays out if the interventions are successful. The investors make a profit if the project works, and lose money if it does not.

The Bridges fund has already invested in two SIBs in the UK – one which supports voluntary adoption agencies working with families to adopt harder-to-place children, and another, commissioned by Manchester City Council and run by Action for Children, which supports foster care for children with emotional and behavioural difficulties.