Hearthstone Investments, the specialist residential fund manager, has received FSA approval to launch the UK’s first regulated residential property fund.
The TM Hearthstone UK Residential Property Fund is due to soft launch this summer. A full roll-out is planned for September 2012. This will give investors for the first time access to a £4trn residential property market through an authorised fund.
The fund is structured as a Property Authorised Investment Fund (PAIF) and will be open to a range of investors, from individuals with ISAs and SIPPs to large scale institutional pension schemes. The minimum investment for retail share classes is £1000. The fund will allow regular savings.
David Gibbins and Lucy Hawkins will manage the fund. Both are leading residential property fund managers. They will aim to track the House Price Index by investing in private rented sector properties throughout the UK.
The business is currently working with major house builders to seed the fund with an initial portfolio of £30-50 million. The team will acquire existing building stock, and work with developers to support future acquisitions. This should contribute to UK housing supply in a time of rapidly rising demand.
Hearthstone has a target of £250 million in the first 24 months, with the potential of rising to £1 billion as adoption of residential funds becomes more widespread in the longer term.
Earlier this year the Connells Group, the leading estate agency and property services provider acquired a 25% stake in Hearthstone Investments plc.
Christopher Down, chief executive of Hearthstone Investments comments:
“At over £4 trillion, residential property is the largest asset class in the UK. Despite this, there have been no authorised funds in the sector, and most investors have been offered little choice other than direct ownership of bricks and mortar. Hearthstone’s fund platform will correct this anomaly, offering both retail and institutional investors the same investment options in residential as they have in other asset classes. FSA approval for our first fund is a significant step forward in enabling us to do this.”
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