First regulated resi property fund launched

First regulated resi property fund launched


The UK’s first regulated residential property fund is set to launch this month, having received approval from the FSA to give investors access to the £4 trillion residential property market through an authorised fund.

The TM Hearthstone UK Residential Property Fund is structured as a PAIF (Property Authorised Investment Fund) 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 £1,000.

Hearthstone's target for the fund is £250 million in the first 24 months of it going live, rising to potentially more than £1 billion in the longer term as the adoption of the residential funds becomes more widespread.

The fund will be managed by residential property fund managers David Gibbins and Lucy Hawkins, who will aim to track the House Price Index by investing in private rented sector housing across the UK.

The business is currently working with major house builders to provide the fund with an initial portfolio of around £30-£50 million. As well as acquiring existing build stock, the team will work with developers to support future acquisitions from new residential developments, responding to the growing demand for UK housing.

Earlier this year, estate agency and property services provider the Connells Group, a wholly owned subsidiary of Skipton Building Society, acquired a 25 per cent strategic stake in Hearthstone Investments plc.

Commenting on the launch, Christopher Down, founder and Chief Executive of Hearthstone Investments, said: "At over £4 trillion, residential property is the largest asset class in the UK - bigger than UK equities and commercial property combined. 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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