Housebuilder Barratt backs Hearthstone Paif with £22.5m seed investment

30 July 2012 | By Rob Langston

The UK’s biggest homebuilder Barratt Developments has seeded the Hearthstone Investments property authorised investment fund (Paif) with a £22.5m seed investment deal.

The deal will be stretched over three tranches and is linked to the growth of the fund. It will see Barratt provide a suite of showhomes, to be licensed back to the company, providing fund with immediate income before the homes are let or sold.

Hearthstone expect this to be the first of a number of property-based seeding deals with housebuilders that will generate £50m.

The TM Hearthstone UK Residential Property fund, is due to soft launch in the coming weeks before a full launch in September.

Hearthstone chief executive Christopher Down says: “Barratt’s showhome portfolio, together with that of our other partners, will provide the fund with immediate scale and income, giving investors and their advisers the ability to invest with confidence.”

Barratt chief executive Mark Clare adds: “Our strategy is to secure best value whilst unlocking cash from our balance sheet and driving down debt; selling some of our showhomes and licensing them back achieves just that.

“At the same time, this new fund is an important strategic development in our marketplace - the creation of a professional private rental fund operating at scale, which is something that the UK really needs.”

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