Three of Mill Group’s senior directors have left the troubled firm to join Hearthstone Investments as it prepares to close a major private rented sector fund.
Andrew Smith, the former head of global property at Aberdeen Asset Management and executive director at Mill Group, has moved to the residential fund manager alongside Richard Otten and Christoforo Rocco.
The trio are close to securing an initial close of £120m for a new fund that has a final target of £300m. The investors are four local authority pension funds and a bank.
Hearthstone has £73m of residential assets under management and is led by chief executive Christopher Down.
The trio’s departure follows the delisting and winding down of Mill Residential REIT in October last year. The REIT failed to gain scale with net assets of only £3.2m.
Mill Group said: “The [transfer of employees and intellectual capital] does not affect any of Mill Group’s existing property assets or management contracts and relates to a future institutional private-rented sector fund.”
Mill Group is now managed by remaining directors Richard Toplas and Simon Phillips. It will continue to run a £50m PRS portfolio, which it owns in a joint venture with Bovis Homes and the Homes & Communities Agency. The 177 build-to-rent homes, known as the Oak portfolio, are spread across five locations in Cambridge, Bristol, Gloucester, Southampton and Horsham and are 97% occupied.
The portfolio has the potential to seed or expand other players’ portfolios that are looking to build scale in the PRS.
Hearthstone launched the UK’s first residential Property Authorised Investment Fund in 2012. One of the fist investors was Islington Council Pension Scheme.
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