Hearthstone Investments, a specialist fund manager in UK private rented housing, has launched a new fund to provide institutional investors with a further opportunity to invest in the UK private rented housing sector.

The Hearthstone Residential Fund has a target initial close of £70m.

It 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 and raised £152m.

One difference with the new fund, however, is its semi open-ended “evergreen” structure, with opportunities for investors to top-up their holdings or to reduce exposure if their needs change.
As with the two previous funds, it will provide institutional investors with an opportunity to strengthen their environmental and social credentials.

Homes within Hearthstone’s portfolio are energy-efficient and have carbon emissions per unit averaging just 1.3 tonnes per annum, compared with the average UK home of 6 tonnes. The firm stated that its new fund will seek to “make further progress towards carbon neutrality and energy efficiency”.

Chief investment officer at Hearthstone Investments, Andrew Smith, commented: “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 10-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.”

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