Caledonia Investments is to acquire a majority stake in Seven Investment Management, in a deal which values the business at £100m.
Caledonia, a UK investment trust company, will invest up to £77m in cash to acquire 94 per cent of 7IM Holdings from its current owners, Aegon and Zurich Insurance.
7IM’s management team will subscribe £5m for the remaining equity, with the balance of the purchase costs to be provided by £25m of bank debt, which Caledonia has agreed to underwrite if it is not in place by completion.
Wealth manager 7IM was established in 2002 and has assets under management and administration of £9.5bn.
In February it was reported that Aegon and Zurich had appointed Evercore to advise on a potential sale, with the business expected to be valued at between £50m and £60m.
But in April it was reported the business could be valued at over £100m and a number of private equity firms had expressed interest in the sale.
Earlier this month it was reported that 7IM was in advanced talks with Caledonia.
7IM chief executive Tom Sheridan says: “We are delighted to be partnering with Caledonia in the next phase of 7IM’s development. Their investment philosophy and culture, as well as their attitude to longer term investment, are perfectly aligned with our own.
“My colleagues are also pleased to have the opportunity to be providing further investment into the business alongside Caledonia. We have many exciting developments and ideas for our clients, 7IM and our industry, and having Caledonia as a partner will greatly help us in achieving some very exciting goals.”
Caledonia head of unquoted investments Duncan Johnson says: “Caledonia has a long history of investing in successful fund management businesses.
“We look forward to supporting Tom Sheridan and his team in building on 7IM’s impressive growth record and strong investment performance to service an expanding UK wealth management market where there is a growing demand for multi-asset and multi-manager funds.”