Caledonia Investments has agreed to acquire the UK-based provider of discretionary fund management, retail investment funds and platform services.
Subject to approval from the UK's Financial Conduct Authority, Caledonia will invest up to £77 million in cash to acquire around 94 per cent of 7IM Holdings, the controlling member of Seven Investment Management, the trust company said in a statement on the London Stock Exchange.
7IM's management team will subscribe £5 million for the remaining equity, with the balance of the purchase costs to be provided by £25 million of bank debt.
7IM, which is currently owned by Allied Zurich Holdings and Aegon UK, had around £9.5 billion of assets under management and administration at the end of March. For 2014, 7IM Holdings generated a pre-tax profit of £8.6 million and had gross assets of £42.9 million.
The business was set up in 2002 by chief executive Tom Sheridan, head of corporate development Justin Urquhart Stewart, and chief finance officer Charles Sparrow.
“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,” said Caledonia's head of unquoted investments, Duncan Johnson.
Caledonia currently has net assets of around £1.6 billion. The acquisition comes as part of its plan to invest between £25 million and £100 million in private companies, either on a majority or minority basis. Its current unquoted portfolio includes Cobehold, a European investment house, and The Sloane Club, a London residential club.