Hearthstone Investment Management Ltd

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Hearthstone Residential Fund 1 Makes First Acquisition

Date 05th February 2018
Source Hearthstone Investment Management Ltd
Type Press release

£24.325 million deployed in private rented sector in UK regions

Hearthstone Investment Management Limited, a property focused institutional investment manager, has announced its first acquisition for Hearthstone Residential Fund 1 (HRF1), a private equity vehicle investing into the UK’s private rented sector which had its first close in December 2017.

HRF1 is acquiring a portfolio of 171 homes, which was purchased for £24.325 million from the Vista UK Residential Real Estate Fund, managed by Hermes Investment Management and Countrywide Plc.

The portfolio contains four modern low-rise, mid-sized apartment blocks with a combination of one and two bedroomed apartments in areas of strong rental demand and excellent local infrastructure. Two of the blocks are in Manchester with one close to the city centre and another in the city’s eastern suburb of Droylsden. The other two blocks are well positioned in Birmingham and Nottingham.

Andrew Smith, Partner and Chief Investment Officer, Hearthstone Investment Management stated, “This acquisition is consistent with HRF1’s strategy to build a regionally-diversified private rented sector portfolio comprising houses and low-rise blocks including both new-build schemes and high quality standing stock. We are confident this is an excellent start for the new fund.”

The blocks, currently occupied by professionals and young families, will be managed by Hearthstone Investment Management’s asset management team headed by Richard Otten.

“The purchase of an existing privately-rented investment portfolio offers the benefit of an immediate income,” explained Richard Otten, Partner and Director of Asset Management, Hearthstone Investment Management.

Advising the vendor were Lambert Smith Hampton acting as agent and Pinsent Masons LLP. Charles Russell Speechlys LLP advised Hearthstone Investment Management Ltd in connection with the acquisition.

HRF1, a ten-year closed-end private equity vehicle is advised by Hearthstone Investment Management Limited, a 50:50 joint venture between the senior management team and Hearthstone Investments Plc. At first close, the fund received commitments of £100 million from a cornerstone investor group of five local authority pension funds, including the Derbyshire Pension Fund, Nottinghamshire Local Government Pension Fund, Staffordshire Pension Fund, Teesside Pension Fund and West Midlands Pension Fund.