Leading estate agency and property services provider Connells Group has acquired a 25 per cent strategic stake in residential property fund manager Hearthstone Investments plc.

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.

Hearthstone is a new fund management business established to provide retail and institutional investors with a full range of access to collective investment opportunities in residential 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 just £1,000.

"The UK is a nation of homeowners and the desire to invest in residential property is as strong as ever," says David Livesey, Chief Executive for the Connells Group who will now join Hearthstone's Board of Directors along with Connells Group Executive Chairman Stephen Shipperley.

"This new fund from Hearthstone in partnership with the Connells Group 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," David continues. "We believe the innovative nature of the fund combined with Connells' renowned property expertise will make this a must buy for investors."

The transaction will enable Hearthstone to utilise the Connells Group's breadth of expertise. All property acquisitions by the fund will be made through Connells' specialist Investor Sales Division and disposals will be managed by Connells Asset Management. Additional services like Connells Home Conveyancing will also be used to support the partnership.   

"The Connells Group is well placed to ensure maximum yields on investment decisions through the expertise we have within the Group," says David. "We will be advising Hearthstone on the viability of investments on a range of properties, from new homes developments to second-hand properties, repossessions and part-exchanges." 

"At over £4 trillion, residential property is the largest asset class in the UK - significantly more than UK equities and commercial property combined," says Christopher Down, founder and Chief Executive for Hearthstone. "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 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.

"We look forward to our partnership with the Connells Group, which, as a leading player in the agency and services market, will add significant operational resources to those of our existing team," Christopher continues.

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Further information

Connells Group: For further information and photography, please contact the press office on 01525 218536 or email Julia Brook, Group PR Manager: Julia.brook@connells.co.uk or Christine Webb, Group PR Executive: Christine.webb@connells.co.uk

Hearthstone Investments:

Property: Dominic Morgan, FTI Consulting - 020 7263 9343 / 07775 518 587 / dominic.morgan@fticonsulting.com

Robert Bull, FTI Consulting - 020 3077 0457 / 07515 597 435 / Robert.bull@fticonsulting.com

Financial services: Andrew Appleyard, MRM - 020 3326 9910 / 07909 684 468 / Andrew.appleyard@mrm-london.com

Jon Atkins, MRM - 020 3326 9910 / 07557 286 721 / jon.atkins@mrm-london.com   

Notes to editors

About the Connells Group:
Founded in 1936 and comprising of 486 branches nationwide, the industry-leading Connells Group is the most profitable UK estate agency network. In addition to operating under the Connells brand, the Group trades under other well-known local names including Allen & Harris, Bagshaws Residential, Barnard Marcus, Brown & Merry, Fox & Sons, Jones & Chapman, Manners & Harrison, Roger Platt, Shipways, Swetenhams, William H Brown, Sharman Quinney, Burchell Edwards and Ashley Adams. As well as residential property sales and lettings, the Group has a comprehensive range of B2C and B2B services including new homes, mortgage services, conveyancing, EPCs, surveying, corporate lettings, asset management, land & planning, LPA receivers, auctions and relocations. The Connells Group is consistently named Best Large Estate Agency at the Estate Agency of the Year awards, winning the top prize for six of the past eight years. It is also highly acclaimed in the New Homes category, winning Gold four times in the last seven years, and in the Financial Services category for which it has won the Gold prize for the last three years.

About Hearthstone:
Hearthstone Investments plc is a specialist residential property fund management business which was launched in 2010. It aims to provide access to collective investments in residential property for all investors, from first-time buyers and private investors through to large-scale pension funds. The Hearthstone team is behind the UK's first residential PAIF, which was submitted to the FSA in October 2011 for approval and is expected to launch in the second quarter of 2012.

In early 2012, the business completed a strategic investment deal with the Connells Group, a subsidiary of Skipton Building Society, who agreed to invest £2m in return for a 25 per cent equity stake in the business.

Hearthstone's management team draws on talent from across the financial services and property sectors. Chairman Jeff Pulsford is the former CEO of Arlington Securities and Goodman's European business with £8bn FUM, while Senior Fund Manager David Gibbins has specialised in the residential property sector for more than 20 years, including as Residential Fund Manager for Goodman Property Investors and Morley. Sales and Distribution Director Mark Forman is former Sales Development Director at L&G Unit Trust Managers, and Commercial Development Director Mark Witherspoon has a long history in the mortgage industry at Barclays and as the former CEO at UK Valuation.

Non-executive Director Mike Kirsch is a former Executive Director at Norwich Union and former Chief Executive of IFA group AWD Chase de Vere. Fellow Non-executive Directors Ben Freeman (former FD at PruPIM), Nick Baker (former Head of Communications at Barclays Global Investors) and Nigel Pope (former CFO at Goodman European) complete the team.

Hearthstone's FSA authorised funds will be operated by Thesis Unit Trust Management Limited (Tutman), with Eversheds acting as legal advisors. Northern Trust will supply administration and custody services while NatWest Trustee and Depositary Services will act as depositary for the schemes.

 
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For further information, please contact:

Julia Brook
t: 01525 218536
e: julia.brook@connells.co.uk