Hearthstone Investments

What Hearthstone Investments does

Hearthstone Investments is a London-headquartered institutional fund manager that specializes in UK affordable private rented housing. The firm, founded in 2009 and with its first fund launched in 2012, pioneered institutional capital deployment into suburban single-family rental housing for UK Local Government Pension Schemes and other long-term institutional investors. It manages over 1,800 income-generating homes across more than 100 UK locations through five fund vehicles: the closed-ended Hearthstone Residential Funds 1 (£200m+, 2019 close) and 2 (£152m, 2021 close), the Housing Fund for Scotland (£30m, 2014), a segregated advisory mandate for Swiss Life Asset Managers' Property Income Trust for Charities (PITCH, £30m initial for ~120 homes), and a new open-ended Hearthstone Residential Fund launched in 2023 targeting a £70m initial close. The firm acquires newly built, energy-efficient stock in bulk directly from UK housebuilders, with 78% houses / 22% flats, 98% EPC B or better, and 81% of stock affordable to local residents (rent below 33% of household income). Hearthstone reported 4% net income yield for HRF2, 97% rent collection in 2022, and 63% lower CO2 emissions versus the UK average home.

The business operates a fee-based asset management model under FCA oversight (via Langham Hall Fund Management LLP as AIFM and Mayfair Capital for the PITCH mandate), distributing institutional products through direct sales to UK LGPS, Dutch institutional investors (post-NPPR approval in May 2024), and segregated mandates. Revenue is generated principally through fund management fees on £450m+ of assets under management, with pricing negotiated bilaterally with institutional investors and not publicly disclosed. There is no proprietary technology platform disclosed; operational capabilities center on property portfolio management, ESG monitoring, and a 78%-plus suburban house acquisition pipeline sourced from a network of national housebuilders (Countryside Partnerships, PSP) and regional SME developers (3West, Sky-House, Hills Residential). Distribution is sales-led via a dedicated Head of Investor Relations, supplemented by an annual Residential Investment Conference at Barber-Surgeons' Hall and ESG thought leadership through INREV, UN PRI (4-star 2025 rating), Future Homes Hub, Good Homes Alliance, and Pensions for Purpose.

Name

Hearthstone Investments

Legal name

Hearthstone Investments Limited

Website

https://hearthstone.co.uk

Company type

Private

Founded year

2012

Operating status

Operating

Headcount range

11–50 employees

Short description

Hearthstone Investments is a London-based institutional fund manager that invests in UK affordable suburban private rented housing on behalf of Local Government Pension Schemes, charities, and other long-term institutional investors through multiple closed-ended and open-ended fund vehicles.

Ownership category

akta.pro rank

Product category

Residential Real Estate Investment Management

NAICS

Portfolio Management and Investment Advice (52394), Portfolio Management and Investment Advice (523940)

SIC

Investment Advice (6282)

akta.pro primary industry

Real Estate Funds — Opportunistic / Development (FSANAEAI)

Keywords

• Residential real estate funds
• Institutional property investment
• Private rented housing
• Pension fund management
• Affordable housing investment

Headquarters

HQ city

London

HQ country

United Kingdom

HQ region

Europe

Offices2 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Infrastructure, Marketing or Sales, Technology or R&D, Others

Revenue model

1. Fund Management Fees: Hearthstone Investments generates revenue through management fees charged on funds under management, including Hearthstone Residential Fund 1 (£200m), Hearthstone Residential Fund 2 (£152m), and the new open-ended Hearthstone Residential Fund. The company also earns fees from segregated mandates such as the PITCH mandate managed for Swiss Life Asset Managers.

Pricing tiers

Go-to-market motion2 records

Distribution channels3 records

Marketing channels5 records

Core offering

Hearthstone Investments is a UK-based specialist fund manager that builds and manages institutional investment funds focused on affordable, energy-efficient private rented housing. The firm raises capital primarily from UK Local Government Pension Schemes and other institutional investors, deploys it into newly built suburban residential stock acquired in bulk from housebuilders, and operates the resulting rental portfolios across England, Wales and Scotland.

Product overview

Hearthstone Investments operates as a fund management company offering institutional investment products focused on UK affordable private rented housing. The company manages five distinct fund vehicles: Hearthstone Residential Fund (open-ended perpetual structure), Hearthstone Residential Fund 1 (closed-ended, £200m, launched 2017), Hearthstone Residential Fund 2 (closed-ended, £152m, launched 2020), a Segregated Mandate for Swiss Life Asset Managers' PITCH fund, and Housing Fund for Scotland. Together these manage over 1,800 homes across the UK.

Differentiator

Problem solved

Functional benefit

Brands

• Hearthstone Residential Fund: The latest institutional fund with an open-ended structure and perpetual life, following the same investment strategy as its predecessors. Designed for institutional investors seeking diversified portfolio of high quality private rented residential assets.
• Hearthstone Residential Fund 1 (HRF1)
• Hearthstone Residential Fund 2 (HRF2)
• Segregated Mandate (PITCH)
• Housing Fund for Scotland

Products and services

• Hearthstone Residential Fund An open-ended institutional fund with perpetual life providing income return supplemented by capital growth for long-term institutional investors through a diversified portfolio of UK private rented residential assets.
• Hearthstone Residential Fund 1 (HRF1) A ten-year closed-ended private equity fund launched in December 2017 with just over £200 million in equity commitments from seven UK local government pension schemes, investing in suburban UK private rented housing.
• Hearthstone Residential Fund 2 (HRF2) A closed-ended ten-year fund launched in October 2020 that achieved final close in December 2021 at £152 million with backing from five UK Local Government Pension Schemes, structured as an English Limited Partnership using an unleveraged core investment style.
• Segregated Mandate (PITCH) Investment advisory mandate for Swiss Life Asset Managers' Property Income Trust for Charities (PITCH), focusing on single-family private rented homes for lower income households, with an initial £30 million commitment for approximately 120 homes.
• Housing Fund for Scotland A fund launched in 2014 with a £30 million cornerstone investment from Falkirk Council Pension Scheme, investing in a blend of affordable and market rented housing in selected locations across Scotland.

Quantifiable outcome

• Hearthstone homes generate 63% less CO2 emissions than the average UK home
• +8 more outcomes

Named customers13 records

Segments4 records

Ideal customer profiles2 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Partnerships

Seven partnerships are on record, tiered strategic, minor and core.

• 3West GroupstrategicChannel Partner/ Reseller/ Distributor · 1 April 2024Hearthstone acquired 45 houses from 3West Group at their Goodmores scheme in Exmouth, East Devon. 3West is a privately owned regional SME developer operating across the South West of England. This was their first venture of scale with an institutional investor.
• Sky-HousestrategicChannel Partner/ Reseller/ Distributor · 1 October 2023Sky-House sold 11 eco-homes at Waverley in Rotherham to Hearthstone. This was Sky-House's first transaction with a specialist fund of this kind. The homes are part of Yorkshire's largest brownfield regeneration project at the former Orgreave Colliery.
• Countryside PartnershipsstrategicChannel Partner/ Reseller/ Distributor · 1 March 2023Hearthstone agreed purchase of 31 houses at St James' Park development in Bishop's Stortford with Countryside Partnerships. The development will eventually include over 750 homes plus a care home and business park.
• PSP (housebuilder)strategicChannel Partner/ Reseller/ Distributor · 1 June 2022PSP developed zero carbon homes in Sittingbourne, Kent in partnership with NetZero Buildings. Hearthstone purchased the entire scheme of zero carbon houses, demonstrating a strategic relationship with the developer for MMC-constructed net zero homes.
• Hills ResidentialstrategicChannel Partner/ Reseller/ Distributor · 1 April 2022Hills Residential developed nine new build houses in Elmstead Market near Colchester for PITCH mandate. Properties are heated by air source heat pumps with strong sustainability credentials.
• Latch (Leeds Action to Create Homes) LtdminorOthers · 1 January 2022Since 2022, Hearthstone works with Latch as corporate charity partner. LATCH refurbishes derelict houses in Leeds to provide housing for homeless people. Hearthstone raised over £3,000 in 2023 and works with contractors to keep the container stocked with materials.
• Langham Hall Fund Management LLPcoreImplementation/ SI/ Consulting PartnerLangham Hall Fund Management LLP operates as the Fund's external AIFM (Alternative Investment Fund Manager), providing regulatory oversight and governance for Hearthstone's funds. Authorised and regulated by the FCA.

Scale indicators12 records

Recent moves6 records

Expansion highlights5 records

Direct peers

• Get Living plc: Get Living is one of the UK's largest Build to Rent operators, focused on large-scale urban BTR schemes. While more urban-focused than Hearthstone's suburban houses, it competes for the same institutional capital pool and offers institutional investors an alternative residential PRS exposure in the UK.
• Home REIT plc: Home REIT was a UK-listed investment trust focused on providing newly built, high-quality, fully-furnished, single-family rental accommodation to local authority and charity tenants. It directly competed with Hearthstone in the institutional residential rental space, particularly the affordable / sub-market segment.
• Sigma Capital Group: Sigma Capital Group was a specialist UK PRS fund manager focused on suburban family housing for institutional investors, with a closely comparable investment thesis to Hearthstone (suburban new-build houses, institutional capital, PRS focus). Sigma's PRS REIT was acquired by Home REIT, making it a highly relevant historical peer.
• Grainger plc: Grainger is the UK's largest listed residential landlord and a major player in the Build to Rent and private rented sector. It is a direct competitor to Hearthstone in the UK PRS institutional market, with both firms building large-scale, professionally managed residential portfolios targeting institutional capital, though Grainger is significantly larger and vertically integrated.
• Legal & General Affordable Homes: Legal & General Affordable Homes invests institutional capital in UK affordable and PRS housing. It is a direct peer in the institutional UK residential investment space, though L&G operates at much larger scale with broader affordability mandates and balance-sheet investment from the L&G Group.
• Mayfair Capital Investment Management: Mayfair Capital is a UK real estate investment manager that partners with Hearthstone to manage PITCH mandates. While a partner rather than pure competitor, it operates in the same UK institutional residential property space with LGPS and charity capital, and serves a comparable client base.
• Patrizia UK Residential Fund: Patrizia manages European residential property funds including UK single-family rental strategies, competing directly with Hearthstone for institutional capital seeking UK residential exposure. Both firms operate fund-based vehicles targeting institutional investors with multi-country distribution.

Broad incumbents

• M&G Real Estate: M&G Real Estate is one of Europe's largest real estate investment managers with significant UK residential and PRS exposure through pooled funds and segregated mandates. It competes with Hearthstone for UK institutional capital, particularly LGPS and pension fund allocations, though at much larger scale across multiple property sectors.
• Schroders Capital Real Estate: Schroders Capital manages institutional real estate funds across the UK and Europe, including residential strategies. It competes for the same LGPS and pension fund capital seeking UK residential exposure, though as part of a broader multi-sector and multi-strategy real estate platform.
• abrdn (formerly Aberdeen Asset Management) Real Estate: abrdn is a global asset manager with a substantial UK real estate investment business managing pension fund capital across multiple property sectors. It competes with Hearthstone in the institutional UK property space and is particularly relevant given Hearthstone's CIO Andrew Smith previously led abrdn's property business overseeing £20bn+ of client assets.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks6 records

Key highlights7 records

Customer concentration

• LinkedInlinkedin.com/company/hearthstone-investments

Compliance3 records

Revenue estimate

Valuation estimate

Number of profiles

Profiles13 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments1 record

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Hearthstone Investments