Caledonia Investments has sold its majority stake in wealth management firm 7IM to the Ontario Teachers' Pension Plan for about £255mn.
Rumours about 7IM's sale began floating around back in 2022, when it was rumoured Brooks Macdonald would be a buyer.
Caledonia bought 7IM in 2015 in a deal worth about £100mn.
Tom Leader, Caledonia's head of private capital, said: “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.
“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.”
7IM, which was founded in 2002, manages some £21bn of assets on behalf of more than 2,300 financial advice firms and 7,000 private clients across the UK.
Ontario Teachers is backing 7IM’s current management team and the firm will continue to retain its existing strategy under the leadership of chief executive officer Dean Proctor.
Proctor thanked Caledonia for its support and resources over the years in helping 7IM to deliver on its strategy and vision.
He added: “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 and accelerating our growth to cement our position as one of the leading vertically integrated wealth managers in the UK which encompasses an award-winning platform and leading multi-asset investment management capabilities.
"What doesn't change, however, is our ongoing commitment to our strategic vision of providing an unrivalled experience to our colleagues and clients, that has long been at the heart of 7IM's success."
7IM is headquartered in London and Edinburgh, and has more than 500 staff across the UK.
According to an announcement this morning (September 5), Caledonia is expected to receive cash proceeds of £255mn, net of transaction expenses, for the sale of its shares in 7IM.
The cash proceeds will be held on deposit for future investment.
In its audited accounts, Caledonia's shareholding in 7IM was valued at £187.1mn excluding a further £13.2mn which will be invested into the business before completion.
The deal is subject to approval by the Financial Conduct Authority and is expected to complete in late 2023 or early 2024.
Ontario Teachers is a global investor with net assets of $249.8bn as at June 30, 2023.
The private capital team at Ontario Teachers has made 13 investments in financial services companies globally. Recent transactions in the sector include Ontario Teachers’ acquisition of Allworth, a US investment and financial advice firm; Diot-Siaci, an independent European insurance broker; and HomeEquity Bank, a Canadian bank offering reverse mortgage solutions.
amy.austin@ft.com
