Caledonia signs agreement to sell 7IM

Caledonia Investments PLC

05 September 2023

 

CALEDONIA INVESTMENTS PLC

CALEDONIA PRIVATE CAPITAL SIGNS AGREEMENT TO SELL 7IM

Caledonia Investments plc ("Caledonia") is pleased to announce that it has agreed terms for the sale of its majority stake in Seven Investment Management ("7IM"), a vertically integrated retail wealth management business, to Ontario Teachers' Pension Plan Board ("OTPP"), a global investor with approximately C$250 billion in net assets. 

The transaction is subject to change in control approval by the Financial Conduct Authority and is expected to complete in late 2023 or early 2024.

7IM was acquired by Caledonia in September 2015 and has since grown strongly both organically and through acquisition. Supported by Caledonia, 7IM has continued to invest in its market leading proprietary platform service and has expanded its direct to consumer offering via multiple strategic acquisitions. Today 7IM is a highly client-centric, vertically integrated wealth management business, which encompasses an award-winning platform and leading multi-asset investment management capabilities, led by CEO Dean Proctor.

Subject to the exact timing of completion, Caledonia is expected to receive cash proceeds of c.£255m, net of transaction expenses, for the sale of its ordinary and preference shares in 7IM. The cash proceeds will be held on deposit for future investment. In its audited accounts as at 31 March 2023, Caledonia's shareholding in 7IM was valued at £187.1m excluding a further £13.2m which will be invested into the business prior to completion.

Commenting on the sale, 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. 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."

Dean Proctor, CEO of 7IM, commented:

"The team and I would like to thank Caledonia for their 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 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."

05 September 2023

For further information contact:

Company contacts
Caledonia Investments plc	[phone]
Mat Masters Chief Executive Officer Rob Memmott Chief Financial Officer
Tom Leader Head of Private Capital
Media contacts
Teneo	[phone]
Tom Murray Robert Yates [e-mail]

This announcement contains inside information in relation to Caledonia.

END

Notes for editors:

Caledonia Investments plc

Caledonia is a self-managed investment trust company listed on the London Stock Exchange with net assets of approximately £2.8bn as at 31 July 2023. The company maintains a concentrated portfolio of international quoted, unquoted and fund investments and has paid an increasing annual dividend for 56 years.

In the Private Capital arena, Caledonia typically seeks to invest £50m to £150m in private companies, either on a majority or minority basis, where Caledonia provides enduring capital and support to investee company management teams over the longer term.  The Caledonia Private Capital portfolio includes Stonehage Fleming (a multi-family office providing fiduciary and investment management services to UHNW clients and families), Cobehold (the holding company of Cobepa, a European unquoted investment house), Cooke Optics (a UK manufacturer of premium cinematography lenses), Liberation Group (a pub, restaurant and drinks business with a pub estate stretching from Southwest London to Bristol and the Channel Islands) and AIR-serv Europe (a leading designer and manufacturer of air, vacuum and jet wash machines provided as turn-key solutions to fuel station forecourt operators).

For additional information on Caledonia Private Capital, please visit www.caledoniaprivatecapital.com and for Caledonia please visit www.caledonia.com.

7IM

7IM provides wealth management, asset management and platform services to over 9,000 retail investors and over 2,000 intermediaries in the UK. At the core of its business is a proprietary investment platform which provides award-winning service and functionality to financial advisors, alongside a multi-asset investment management function that aims to provide low-volatility, low-cost returns utilising both active and passive strategies. When Caledonia acquired the business in September 2015, 7IM had assets under management (AUM) of £9.5 billion. Today, 7IM has circa £21 billion AUM. For the financial year to 31 December 2022, Caledonia Thames Holdings Jersey Limited, the company through which Caledonia holds its investment in 7IM and which will be sold as part of the transaction, generated a pre-tax profit of £11.0m and had gross assets of £213.9m.

For additional information on 7IM, please visit www.7im.co.uk.

About Ontario Teachers' Pension Plan

Ontario Teachers' is a global investor with net assets of $249.8 billion as at June 30, 2023. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 336,000 working members and pensioners.

With offices in Hong Kong, London, Mumbai, San Francisco, Singapore and Toronto, our more than 400 investment professionals bring deep expertise in industries ranging from agriculture to artificial intelligence. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.4% since the plan's founding in 1990. At Ontario Teachers', we don't just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on LinkedIn. 

Transaction

The sale of 7IM was led by Tom Leader, Dan Lock and James Lander for Caledonia.

7IM and Caledonia were advised as follows:

•	Evercore (Ollie Clayton, Demetris Efthymiou and Stephane Houpert) provided lead sell side advice.
•	Macfarlanes (Stephen Drewitt) provided legal advice and legal vendor due diligence.
•	Oliver Wyman (Martin Sanchez) provided commercial vendor due diligence.
•	PwC (Andrew Cann, Stephen Jones, William Barrie) provided vendor financial due diligence.
•	Deloitte (Tim Haden, James Clare) provided tax advice and vendor due diligence.
•	Grant Thornton (David Morrey) provided regulatory and compliance due diligence.
•	Tatsu Partners (Mike Barnes & Lee O'Donnell) provided debt advice.
•	Liberty (Simon Hill) provided management advice to 7IM management shareholders.

Neither the contents of Caledonia's nor 7IM's websites, nor the contents of any website accessible from hyperlinks on these websites (or any other website) is incorporated into, or forms part of, this announcement.

 

END