Hearthstone Investment Management’s UK housing fund has acquired a portfolio of 171 homes for £24.3m (€19.5m).

Hearthstone Residential Fund 1 (HRF1) bought its first assets from the Vista UK Residential Real Estate Fund, managed by Hermes Investment Management and Countrywide.

The portfolio contains four modern low-rise, mid-sized apartment blocks with a combination of one and two bedroomed apartments.

Two of the blocks are in Manchester with one close to the city centre and another in the city’s eastern suburb of Droylsden.

The other two blocks are in Birmingham and Nottingham.

Andrew Smith, a partner and chief investment officer at Hearthstone, said: “This acquisition is consistent with HRF1’s strategy to build a regionally-diversified private rented sector portfolio comprising houses and low-rise blocks including both new-build schemes and high quality standing stock. 

“We are confident this is an excellent start for the new fund.”

Richard Otten, a partner and director of asset management at Hearthstone, said:“The purchase of an existing privately-rented investment portfolio offers the benefit of an immediate income.”

HRF1, a ten-year closed-end private equity vehicle is advised by Hearthstone, a 50:50 joint venture between the senior management team and Hearthstone Investments.

At first close, the fund received commitments of £100m from a cornerstone investor group of five local authority pension funds, including the Derbyshire Pension Fund, Nottinghamshire Local Government Pension Fund, Staffordshire Pension Fund, Teesside Pension Fund and West Midlands Pension Fund.