The Hearthstone Residential Fund will provide institutional investors with a further opportunity to invest in the UK private rented housing sector. They will also benefit from high environmental and social impact credentials.
The fund has a target initial close of £70m and will follow the same investment strategy as Hearthstone’s Residential Fund 1, which closed in 2019 with secured equity commitments of just over £200m, and Hearthstone Residential Fund 2, which closed in 2021, raising £152m.
“The launch of Hearthstone Residential Fund provides institutional investors with another valuable opportunity to benefit from the same highly successful strategy of our previous funds. Not only will income be protected and enhanced through active asset management, important ESG criteria will be embedded into the investment process which centres around raising the standards of homes available to residents in the UK’s private rental market. Hearthstone’s ten-year track record of investing in and managing a portfolio of over 1,800 homes nationally will ensure that the fund benefits from the strongest possible experience and expertise available in today’s private rental sector.”Andrew Smith, Chief Investment Officer, Hearthstone Investments
The fund has a semi open-ended structure, offering flexibility for investors to adjust their exposure.
Homes within Hearthstone’s portfolio are energy-efficient, with carbon emissions per unit averaging just 1.3 tonnes per annum compared with the average UK home of six tonnes. The new fund will seek to make further progress towards carbon neutrality and energy efficiency.
Hearthstone’s homes are aimed at providing groups such as key workers and young families on average incomes the opportunity to live in highly sought after locations.
Earlier this year, Hearthstone acquired over 60 single-family Build to Rent homes in Derby and purchased of 31 homes in Bishop’s Stortford. Last month, the fund manager also announced that it had completed on £93m of acquisitions over the past year.