The TM Hearthstone UK Residential Property Fund, due to soft launch this summer, will give investors access to the £4trn residential property market though an authorised fund.
Structured as a PAIF (Property Authorised Investment Fund), it 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 and the fund permits regular savings.
Earlier this year, estate agency and property services provider the Connells Group, a wholly owned subsidiary of Skipton Building Society, acquired a 25% strategic stake in Hearthstone Investments.
Christopher Down, founder and chief executive of Hearthstone Investments said: “At over £4trn, 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.”
The fund will be managed by residential property fund managers David Gibbins and Lucy Hawkins, who will track house price index’s and invest in private rented sector housing across the UK.
The business is working with house builders to seed the fund with an initial portfolio of around £30m to £50m.
Hearthstone’s target for the fund is £250m in the first 24 months of it going live, rising to potentially more than £1bn in the longer term as the adoption of residential funds becomes more widespread, it said.
