Hearthstone pioneers residential property fund
Specialist residential fund manager Hearthstone Investments has received FSA approval to launch the UK’s first regulated residential property fund.
The TM Hearthstone UK Residential Property Fund will be open to a range of investors, from individuals with Sipps and Isas to large institutional pension schemes. It will be soft-launched during the summer with a full roll-out due in September.
The fund, managed by David Gibbins and Lucy Hawkins, will offer access to the £4 trillion residential property market for the first time, with a minimum investment for retail share classes of £1000. It will track the Land registry’s House Price Index by investing in the UK private rented sector.
Hearthstone is working with major housebuilders to seed the fund with an initial portfolio of £30m to £50m, and hopes to contribute positively to the UK housing supply by working with developers to support future acquisitions.
Its target for the fund is to raise £250m within 24 months, with a longer-term goal of £1bn as the adoption of residential funds become wider.
Christopher Down, founder and chief executive of Hearthstone, said: “Residential property is the largest asset class in the UK, bigger than equities and commercial property combined.
“But despite this there have been no authorised funds in the sector. Hearthstone’s fund platform will correct this anomaly, offering both retail and institutional investors the same options in residential as they have in other classes.”
Tom Sparke, investment analyst for Cambridgeshire-based IFA Gibbs Denley, said: “The fund is a promising and intriguing prospect. Its the first of its kind in a long time.
“We’ll have a look at how it gets on and how the market is going and consider using it in the future. The market has lots of potential.”