The estate agency chain Connells has acquired a 25% strategic stake in a residential property fund manager, Hearthstone Investments.
Hearthstone is a new fund management business, allowing investors to get a piece of the buy-to-let action without having to own a rental property.
Hearthstone’s first fund, subject to FSA approval, will be the UK’s first residential PAIF (Property Authorised Investment Fund). As such, it will allow investments to be made via ISAs and Self Invested Personal Pensions (SIPPs), either directly or through fund platforms, with a minimum investment of £1,000.
The Connells Group will provide advisory services to Hearthstone’s funds, combining ‘grass roots’ rental market information with strong house builder relationships and exposure to ‘off market’ investment portfolios.
Hearthstone will also have access to other areas of expertise within the Connells Group such as bulk conveyancing and asset disposals. All the fund’s acquisitions will be made through Connells’ specialist Investor Sales division, and could include repossessions and part-exchanges.
Connells chief executive David Livesey said: “The UK is a nation of home owners and the desire to invest in residential property is as strong as ever.
“This new fund will provide an innovative way for investors to benefit from the long-term capital growth that we see from property assets and rental income, even if they are unable or do not wish to purchase buy-to-let property themselves.
“We believe the innovative nature of the fund combined with Connells’ renowned property expertise will make this a must-buy for investors.”
Livesey will now join Hearthstone’s board of directors along with Connells group executive chairman Stephen Shipperley.
Christopher Down, founder and chief executive for Hearthstone, said: “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 has been set up to fundamentally change the way the UK invests in residential property, allowing both retail and institutional investors the same investment options in residential as they have in other asset classes.”
Comments
@Alertiormotives
Watch and Learn ??? Are you out of your mind ?
Clearly you are a jealous competitor of Connells. Connells are without doubt the market leader in Estate Agency. Award after award, innovation after innovation - a smart company with a smart leader. Stephen Shipperley is an inspirational man, a man who worked his way up from negotiator to Chairman and took the business from a small profit position in 2005 to where it is today.
I can only assume that your comments are bourne out of a fierce jealousy for Mr Shipperley and his loyal team. Yes, every business makes bad decisions every now and again, but I dont think this is one of those decisions. I predict a monumental success for their new venture - why ? because the vision and leadership at Connells is second to none - and Connells competitors would love to be as smart.
I think, Mr / Mrs Motive, you will be eating your words within the not to distant future....
@ good for you connells :-
As is often the case It's not about what it says rather what it doesn't say ie a "crap" return would still be a return - but not one that the investors will be happy with.
As to Connells only being capable of making "sound" decisions - right - like the one they made to sell tens of millions of Rightmove shares at about 90p just as they started their inexorable rise to their current level of £14.90.
Watch and learn.
@Alteriormotive
You speak utter nonsense. IF you read the article it says that the fund guarantees a return for the investor, and gives people the opportunity to buy into property without having to hand over thousands of pounds and get themselves into debt.
Its about time somebody did this, and a company like Connells who have made a significant profit last year would not invest in such a proposition without it being sound. Furthermore, do you think for one second that they would announce to the press about the investment if they didnt think that the public would see it as a positive ? No.
Also, one of the reasons that Connells have remained one of THE most profitable agencies in the country, is because they have diversified, not sat back on their laurels and made damn sure that they are still around when the going gets tough.
For once, wouldnt it be nice for people to say 'well done Connells, good luck with your investment' instead of the cynical drivell that departs from many of EAT's readers.
Well I say good luck to all involved, I will be paying close attention.
Before I'd invest my money in a company I'd check out their track record first - hmmm not great... co's house shows £1/2m losses last year and another six figure loss the year before!
So If they cant make money for themselves what likelihood is there that they would with someone elses money?!
Connells no doubt see this as a neat unchalleged way to cream off as much as they can for there surveyors, agencies, conveyancers, lettings et al at every turn - clients wont have a choice as Connells own a big stake so will call the shots about who the fund appoints - got to admire there brazeness to issue it as a PR piece though I'd have kept the interst under peoples radar myself. Time will tell but i forecast that Connells are the only ones likely to see a return of any substance on any investment into this excercise in smoke and mirrors.
Japan you mark this idiots words!
Dave talking to you is like talking to myself sometimes.
what I am saying is true and will ring true to you for many many years
Idiot aka Dave
in japan..the word property as an investment is no longer linked
schemes like this are like all the global technology funds that appeared in 1999/2000 just before the bottom fell out of the market.
history shows you should buy a house to live in on a repayment mortgage and stick your money in a bank
ask any private pension holder..most end up with less than they paid in after all the snouts in trough pig out on their funds
I think it is very important that estate agents stick to things they know and understand. This could well be a recipie for disaster and some very unhappy shareholders.