By Pablo Mayo Cerqueiro and Amy-Jo Crowley
LONDON (Reuters) – Caledonia Investments has given prospective buyers until the end of the month to table indicative offers for wealth manager 7IM, two people familiar with the matter told Reuters, in the latest chapter of consolidation in Britain’s money management industry.
U.S. investment bank Evercore distributed marketing materials among prospective buyers in the last two weeks, kicking off a much-anticipated sale of 7IM, which oversees billions of pounds in investments by British savers, said the people, who spoke on condition of anonymity.
Sources provided valuation estimates for 7IM ranging from around 400 to 450 million pounds ($584.60 million) including debt, based on expected earnings before interest, tax, depreciation and amortisation (EBITDA) of roughly 30 million pounds.
Caledonia, 7IM and Evercore declined to comment.
The sale process is largely aimed at private equity firms interested in acquiring a slice of Britain’s wealth management market, the people said.
Unlike continental Europe where investment products are largely distributed through banks, the UK has a vast network of investment advisory shops that help customers manage their money.
Buyout groups have spotted an opportunity to roll up those advisers, as well as their technology suppliers, with a view to selling them to a competitor or taking them to the stock market.
Caledonia, a self-managed investment trust, acquired 7IM in 2015 from insurers Zurich Insurance Group and Aegon NV.
The company has since grown under Caledonia’s ownership, sparking takeover interest along the way.
Sky News reported in April that private equity firm Inflexion was preparing to bid for 7IM once the company came on the block.
Last year, it reported that rival wealth manager Brooks MacDonald had made a failed takeover approach.
However, rocketing interest rates may pose challenges for the wealth management industry, a third person said, if they prompt savers to redeem their investments to pay down mortgages or move their funds into cost-free savings accounts.
($1 = 0.7698 pounds)
(Reporting by Pablo Mayo Cerqueiro and Amy-Jo Crowley in London; Editing by John O’Donnell and Chizu Nomiyama)