Harriet Agnew and Arjun Neil Alim:
The Ontario Teachers’ Pension Plan has agreed to buy UK wealth manager Seven Investment Management, as one of Canada’s biggest investors bets on a sector that is rapidly consolidating.
OTPP is acquiring 7IM, which was founded in 2002 and manages about $21bn in assets, from Caledonia Investments, the companies said on Tuesday. The deal gives 7IM an enterprise value of about £450mn, according to people familiar with the matter.
The move by OTPP comes as wealth and asset managers are bulking up amid rising costs and downward pressure on fees. However, Iñaki Echave, senior managing director at OTPP, said the fund had spent three years looking to buy a UK wealth manager, pointing to several potential tailwinds for the sector.
“Further flows will be supported by pension reforms, wealth advisors are having increased demand and demographic trends mean the government will continue incentivising savings,” he said.
Following the deal, OTPP will own 90 per cent of the business with 7IM’s management holding the rest. 7IM was bought eight years ago by Caledonia, an investment trust linked to the Cayzer family that made its fortune in the shipping business. Caledonia’s stake in 7IM was valued at £187mn as of March 31.