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The Ontario Teachers’ Pension Plan has agreed to acquire a majority stake in British wealth manager Seven Investment Management from Caledonia Investments for £255 million.
The deal underscores the pressure on UK wealth managers to scale up as they grapple with rising costs and increased competition.
Based in London and Edinburgh, 7IM manages £21 billion in assets for over 2,300 UK consultancies and 7,000 private clients. With nearly C$250 billion ($180 billion) in assets, the Ontario Teachers Fund manages the pensions of 336,000 teachers in Canada’s most populous province.
“We intend to leverage our industry expertise and flexible capital to accelerate 7IM’s organic growth through acquisitions,” Iñaki Echave, senior managing director of the Ontario Teachers’ Pension Plan, said in a statement Tuesday.
The acquisition of 7IM adds to the scale of the pension fund’s already direct investments of more than $10 billion in financial services. Following the transaction, 7IM will continue to be led by Chief Executive Dean Proctor.
“We are well positioned for the next phase of growth, and bringing in new investors from the Ontario Teachers Association is a natural and planned next step in 7IM’s evolution,” Proctor said.
Eight years ago, 7IM was bought by Caledonia, an investment trust with ties to the Cayzer family that made a fortune in shipping. Caledonia’s stake in 7IM was worth £187m as of March 31. The sale to the Ontario Teachers Association is expected to close early next year.
Since its establishment in 1990, the Ontario Teachers Foundation has the ability to invest in public stocks in addition to investing in public stocks, infrastructure, venture capital and real estate, with an average annual return of 9.5%. Its model has been adopted by the Canadian public sector.
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