Hearthstone Investments, a specialist fund manager, has unveiled the Hearthstone Residential Fund. This new fund offers institutional investors another chance to invest in the UK’s private rented housing sector, with the added advantage of strong environmental and social impact credentials.

The fund aims to initially close at £70m and will adopt the same investment strategy as Hearthstone’s previous Residential Funds 1 and 2, which closed with secured equity commitments of over £200m and £152m respectively.

Andrew Smith, Chief Investment Officer at Hearthstone Investments, highlighted that the new fund will not only protect and enhance income through active asset management, but will also incorporate important ESG criteria into the investment process. This approach is focused on improving the standards of homes available to residents in the UK’s private rental market.

The fund has a semi open-ended structure, providing investors with the flexibility to adjust their exposure. Hearthstone’s portfolio homes are energy-efficient, with carbon emissions per unit averaging just 1.3 tonnes per annum, compared to the average UK home of six tonnes. The new fund will aim to further advance towards carbon neutrality and energy efficiency.

Hearthstone’s homes are designed to offer groups like key workers and young families on average incomes the chance to live in desirable locations. Earlier this year, Hearthstone added over 60 single-family Build to Rent homes in Derby and 31 homes in Bishop’s Stortford to its portfolio. The fund manager also recently announced that it had completed £93m of acquisitions over the past year.