Catalyst is targeting £25m (€33.6m) for a new social investment fund, including a £5m cornerstone investment from Barclays.
The fund will focus on the growing ethical consumerism sector, as well as investment in companies in the education, health, alternative energy and environment sectors.
It is aimed at institutional investors who want to maximise their financial returns while also generating social returns.
Catalyst plans to invest between £500,000 and £4.5m in profitable UK-based businesses in the sectors it has identified.
“Our target sectors are all growing substantially faster than the UK economy, and the size and focus of our fund means that competition from other venture capitalists will be relatively limited,” said the fund’s managing director Malcolm Gloak.
“This, and Catalyst’s familiarity with these sectors, should assist us in identifying attractive prospects and generating high financial returns.”
Big Issue Invest, the investment arm of homelessness organisation the Big Issue, will partner with Catalyst on the fund.