The transaction will see the Connells Group take a leading role in the large scale purchase of properties on behalf of the fund, from new homes developments to second-hand purchases and repossessions.
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.
Hearthstone is a new fund management business established to provide retail and institutional investors with a full range of access to collective investment opportunities in residential 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, either directly or through fund platforms, with a minimum investment of just £1,000.
David Livesey, Chief Executive for the Connells Group who will now join Hearthstone’s Board of Directors along with Connells Group Executive Chairman Stephen Shipperley said:
“This new fund from Hearthstone in partnership with the Connells Group will provide an innovative way for investors to benefit from the long-term growth that we see from property assets even if they are unable or do not wish to purchase buy-to-let property themselves.
“We will be advising Hearthstone on the viability of property investments. The Connells Group is well placed to ensure maximum yields on investment decisions through the expertise we have within the Group. We know that the appetite to invest in residential property is huge and this new fund is a novel way of tapping into that desire by establishing residential property as an asset class.”
All property acquisitions by the fund will be made through Connells’ specialist investor sales division and disposals will be managed by Connells Asset Management. Additional services like Connells Home Conveyancing will also be used to support the partnership.
Christopher Down, founder and Chief Executive for Hearthstone said:
“At over £4 trillion, residential property is the largest asset class in the UK – significantly more 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 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.
“We look forward to our partnership with the Connells Group, which, as a leading player in the agency and services market, will add significant operational resources to those of our existing team."
