Hearthstone Investments has received FSA approval to launch its UK residential property authorised investment fund.
The TM Hearthstone UK residential property fund will be soft-launched in the summer with the full roll-out planned for September.
The fund is structured as a Paif, a tax-efficient investment vehicle that allows funds to pay gross dividends from property rental income with no corporation tax deducted.
The fund will be managed by David Gibbins and Lucy Hawkins and will track the Acadametrics house price index by investing in the private rented sector housing across the UK. Minimum investment is set at £1,000.
Hearthstone says the team is currently working with major UK house builders to seed the fund with around £30m to £50m. Hearthstone has targeted £250m of assets within 24 months of the fund launching.
Hearthstone Investments founder and chief executive Christopher Down says: “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.
“Hearthstone’s fund platform will correct this anomaly, offering both retail and institutional investors the same investment options in residential as they have in other asset classes. FSA approval for our first fund is a significant step forward in enabling us to do this.”