Hearthstone Investment Management’s UK housing fund has made its first investments in north-east England and Wales.

Hearthstone Residential Fund 1 (HRF1) has agreed to buy a portfolio of 34 houses and a low-rise block of 19 flats for £7m from Bovis Peer.

The houses are situated in Doncaster, Hull, Nottingham, Wakefield and Wigan.

The properties comprise a mix of two to four-bed residences in five separate clusters. The flats form a complete low-rise block and are located in Cardiff Bay.

Andrew Smith, Hearthstone Investment Management’ CIO and partner, said: “While this is an investment portfolio of modern Bovis Homes-built properties, they are already tenanted and are therefore income-producing. 

“More specifically, the houses are located in higher yielding areas which will help the fund to achieve its stated income objectives.”  

Richard Otten, a partner and director of asset management at Hearthstone Investment Management, said: “This latest acquisition is particularly attractive as portfolios of good quality, modern stock are rarely available.  We believe that with some targeted improvement expenditure, we will add value to the portfolio.” 

HRF1 is a ten-year closed-end private equity vehicle investing into the private rented sector in UK regions.

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.

HRF1 made its first acquisition in February this year.