FSA gives thumbs up to landmark residential property fund

Hearthstone Investments has received approval from the Financial Services Authority to launch the UK’s first regulated residential property fund.

The TM Hearthstone UK Residential Property fund is due to soft launch in the summer and be fully rolled out in September.

The fund provides UK investors access to the £4 trillion residential property market through an authorised fund for the first time.

Structured as a Property Authorised Investment Fund, the new product is available to wealth managers, institutional investors, as well as retails clients.

Residential property fund managers David Gibbins and Lucy Hawkins will manage the fund, with the aim of tracking the House Price Index by investing in private rented sector housing across the UK.

Hearthstone’s target for the fund is £250 million in the first 24 months of launch, rising to potentially more than £1 billion in the longer-term.

Christopher Down, founder and chief executive of Hearthstone Investments said: ‘At over £4 trillion, residential property is the largest asset class in the UK - bigger 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.’

Earlier this year, estate agency and property services provider the Connells Group acquired a 25% stake in Hearthstone Investments.