The estate agency chain Connells has acquired a 25% strategic stake in a residential property fund manager, Hearthstone Investments.
Hearthstone is a new fund management business, allowing investors to get a piece of the buy-to-let action without having to own a rental property.
Hearthstone’s first fund, subject to FSA approval, will be the UK’s first residential PAIF (Property Authorised Investment Fund). As such, it will allow investments to be made via ISAs and Self Invested Personal Pensions (SIPPs), either directly or through fund platforms, with a minimum investment of £1,000.
The Connells Group will provide advisory services to Hearthstone’s funds, combining ‘grass roots’ rental market information with strong house builder relationships and exposure to ‘off market’ investment portfolios.
Hearthstone will also have access to other areas of expertise within the Connells Group such as bulk conveyancing and asset disposals. All the fund’s acquisitions will be made through Connells’ specialist Investor Sales division, and could include repossessions and part-exchanges.
Connells chief executive David Livesey said: “The UK is a nation of home owners and the desire to invest in residential property is as strong as ever.
“This new fund will provide an innovative way for investors to benefit from the long-term capital growth that we see from property assets and rental income, even if they are unable or do not wish to purchase buy-to-let property themselves.
“We believe the innovative nature of the fund combined with Connells’ renowned property expertise will make this a must-buy for investors.”
Livesey will now join Hearthstone’s board of directors along with Connells group executive chairman Stephen Shipperley.
Christopher Down, founder and chief executive for Hearthstone, said: “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 has been set up to fundamentally change the way the UK invests in residential property, allowing both retail and institutional investors the same investment options in residential as they have in other asset classes.”