Caledonia Investments has agreed the sale of its majority stake in wealth management business, Seven Investment Management (7IM), for £255m.

The investment trust has sold 7IM to the Ontario Teachers’ Pension Plan (OTPP), a global investor with approximately $250bn (£199.1bn) in net assets.

Subject to the exact timing of completion, Caledonia expects to receive cash proceeds of £255m, net of transaction expenses, for the sale of its ordinary and preference shares in 7IM – with the cash proceeds to be held on deposit for future investment. The transaction, which remains subject to change in control approval by the Financial Conduct Authority, is expected to complete in late 2023 or early 2024.

In its audited accounts as of the end of Q1 this year, Caledonia’s shareholding in 7IM was valued at £187.1m, excluding a further £13.2m, which is to be invested into the business prior to completion of the deal.

7IM was acquired by Caledonia in 2015 and has since grown both organically and through acquisition. The firm continues to invest in its proprietary platform service and has expanded its direct-to-consumer offering via multiple strategic acquisitions.

“In the eight years since our acquisition of 7IM in September 2015, the business has more than doubled assets under management, nearly trebled headcount, and significantly enhanced its revenue and profitability,” said head of private capital at Caledonia, Tom Leader.

“Caledonia’s investment philosophy is to focus on growth over the long-term, ensuring that our portfolio companies are well placed for exit when the right time comes for all stakeholders. Our investment in 7IM embodies this philosophy and we are delighted with what Dean and his team have achieved during our partnership. We thank and congratulate them for their stewardship of the business and wish them every success in their new partnership with OTPP.”

7IM CEO, Dean Proctor, said: “The team and I would like to thank Caledonia for its support and resources over the years in helping 7IM to deliver on its strategy and vision. Caledonia’s enduring capital approach has allowed us to focus on what is right for 7IM, our colleagues and, most importantly, our clients.

“We are now well positioned for our next phase of growth, and I am excited about our new partnership with OTPP, who are deeply supportive of the team and the firm’s strategy. With OTPP’s support, we look forward to starting a new chapter in 7IM’s history.”

With UK wealth management a core focus sector for OTPP, the acquisition provides 7IM’s management team with access to long-term capital to help execute its growth plans over the next decade, including the pursuit of organic net flows growth and M&A activity.

Senior managing director at Ontario Teachers’, Iñaki Echave, added: “We are excited to partner with Dean and his team. 7IM is one of the highest-quality, fast-growing financial services platforms in Europe and a perfect example of our strategy to make control investments in our high-conviction sectors.

“We intend to leverage our sector expertise and flexible capital to accelerate 7IM’s growth organically and through M&A. We look forward to helping 7IM’s first class management team to fulfil their ambitious growth plans.”


This article first appeared on our sister title, Corporate Finance News.

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