Triodos Investment Management has closed a £3m fund set up to invest venture capital into social enterprises after just two years, in which it made only one deal of £320,000.

Charles Middleton, Triodos UK managing director said that the Triodos Social Enterprise Fund turned out to be "not quite what we thought":

“When the fund was set up we believed there was an appetite,” said Middleton. “But there haven’t been enough social enterprises ready for this type of equity.”

However, Middleton stressed that it didn’t suggest a lack of appetite for capital in the social enterprise sector:

“If you look out our lending book we have committed £120bn to charities and  social enterprises. That’s a lot of money.

"The equity fund was not what was required right now due to a lack of investment readiness and investment appetite. The recession could also be a reason."