Residential specialist Hearthstone Investments is planning to launch a new fund, as early as the fourth quarter of this year, to join a £1bn private rented sector vehicle announced in May.
Hearthstone is in talks with investors to finalise the investment strategy and size of the new fund, but expects to launch either at the end of this year or the beginning of next, said chief executive Christopher Down.
Hearthstone’s TM Hearthstone UK Residential Property Fund is the UK’s first residential-focused property authorised investment trust.
The PAIF structure is a tax wrapper that prevents tax leakage, and means that pension funds and ISA investors can avoid 20% corporation tax when investing in open-ended funds.
Hearthstone has yet to decide whether the new fund will be a PAIF. But with FSA authorisation and HMRC approval in place, launching the new fund as a PAIF will be relatively swift.
Hearthstone’s target for the first fund is £250m in the first 18 to 24 months, rising to over £1bn by the fifth year. Hearthstone agreed a £15m sale and leaseback arrangement with Bovis Homes last week, having previously signed a similar agreement with Barrett Homes earlier this year.
sophia.furber@estatesgazette.com
