OTPP snaps up Caledonia Investments’ majority stake in wealth management firm 7IM for £255m
Caledonia Investments, a FTSE-250 listed self-managed investment trust based in London, UK, has sold its majority stake in Seven Investment Management (7IM) to Ontario Teachers’ Pension Plan (OTPP).
Subject to the approval of the Financial Conduct Authority (FCA), Caledonia will receive around £255 million for the sale of its ordinary and preference shares in 7IM, which is to be held on deposit for future investment.
An audit of its accounts completed in March of this year valued Caledonia’s shareholding in 7IM at £187.1 million, which excludes the additional £13.2 million expected to be invested before the sale is completed, which is estimated to be in late 2023 or early 2024.
Led by CEO Dean Proctor, 7IM is a retail wealth management business currently serving around 9,000 retail investors and 2,000 intermediaries in the UK with vertically integrated wealth and asset management and platform services.
Caledonia bought the firm from insurers Zurich Insurance and Aegon NV in September 2015 for around £100 million, and in the eight years since, 7IM has more than doubled its assets under management to reach £21 billion with gross assets of £213.9 million.
Tom Leader, Caledonia’s head of private capital, says the trust’s investment philosophy is “to focus on growth over the long term”, only exiting when “the right time comes for all stakeholders”.
Speculation around the firm’s sale grew significantly over the summer with prospective buyers asked to put forward their indicative bids at the end of July. The sale was specifically targeted at private equity firms looking to seize a key position in the UK’s wealth management market.
As the successful bidder, OTPP, a Canadian investor and pension heavyweight with $249.8 billion in net assets, will now take ownership of 7IM and its appealing position within the market, with Proctor adding the firm is now “well positioned for our next phase of growth”.