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Legal & General Sells Cofunds To Aegon

The London-listed group is offloading its funds platform to Aegon, a rival insurance, pensions and asset management company.
Legal & General has agreed to sell Cofunds, the UK investment platform for advisors and other financial institutions, to Dutch insurer Aegon for £140 million ($182 million).
The acquisition, subject to regulatory approval, is expected to complete by December 2016. The sale includes the Investor Portfolio Service platform as well as Cofunds’ retail and institutional business. All Cofunds and IPS staff will move to Aegon.
The deal is third one agreed by Legal & General and Aegon this year. The other two are Legal & General’s acquisition of Aegon’s £2.9 billion back book annuity portfolio and its five-year distribution agreement to provide individual annuities to Aegon pension customers.
“Over the last few years Legal & General Investment Management has developed a market leading international defined contribution pension platform business. LGIM manages £50bn in UK and US defined contribution pension assets, and plans to expand into the DC market of Asia,” said Mark Gregory, Group Chief Financial Officer of Legal & General.
“Cofunds is at the point where it requires a significant upgrade in technology to exploit its leadership position in the UK platform market. We have concluded that this long term commitment is best achieved under Aegon’s ownership as a specialist wealth platform provider.”
Earlier this week, Legal & General reported a pre-tax profit attributable to shareholders of £826 million for the first half of 2016, a year-on-year rise of 23 per cent. However, its investment management arm saw its operating profit fall by £5 million year-on-year during the period to £171 million.
“It’s great news that advisers
using the UK’s biggest platform will be able to access investment
companies following the acquisition of Cofunds by Aegon. This is
another important step towards investment companies gaining their
deserved place in the portfolios of advisers’ clients," Ian
Sayers, chief executive of the Association of Investment
Companies, said.
“Investment companies can now be accessed on the vast majority of
advisor platforms, a significant change from the situation just a
few years ago. As a result, annual purchases of investment
companies have nearly tripled since before the Retail
Distribution Review (RDR), and more than 1,000 advisor firms now
buy investment companies via platforms," Sayers said.