CALEDONIA Investments has acquired a majority stake in Seven Investment Management (7IM), the wealth manager co-founded by Justin Urquhart Stewart, in a deal which values the business at £100 million.

7IM was founded in 2002 by prominent stockbroker Stewart, now head of corporate development, chief executive Tom Sheridan and chief finance officer Charles Sparrow.

It had assets under management and administration of around £9.5 billion at April 30 this year, with a team of more than 190 staff.

Caledonia, a self-managed investment trust with net assets of £1.6bn, will invest up to £77 million in cash to acquire about 94 per cent of 7IM Holdings, the controlling member of Seven Investment Management LLP. 7IM Holdings, which operates the 7IM business, is currently owned by Allied Zurich Holdings and Aegon UK.

The deal will see 7IM's management team subscribe £5m for the remaining equity.

The balance of the purchase costs will be met by £25m of bank debt, which Caledonia has agreed to underwrite in the event it is not in place by the time the purchase is complete.

7IM Holdings reported pre-tax profits of £8.6m and gross assets of £42.9m in the financial year ended December 31.

Caledonia was acquired by the Cayzer family in 1951 to act as a holding company for its various shipping interests. The family continues to have a 48.5 per cent stake in the business, which seeks to invest £25m to £100m in private companies on either a majority or minority basis.

Duncan Johnson, head of unquoted investments at Caledonia, said: "Caledonia has a long history of investing in successful fund management businesses.

"We look forward to supporting Tom Sheridan and his team in building 7IM's impressive growth record and strong investment performance to service an expanding UK wealth management market where there is growing demand for multi-asset and multi-manager funds."

Mr Sheridan said: "We are delighted to be partnering with Caledonia in the next phase of 7IM's development. Their investment philosophy and culture, as well as their attitude to longer term investment, are perfectly aligned with our own.

"This will enable us to continue our focus on, and development of, "doing the right thing" in our business, for not just our partners and staff, but of course most importantly our clients."

Shares in Caledonia closed up 34p at 2,439p.