Cofunds, one of the UK’s main fund platforms, is to be sold by Legal & General to Dutch insurer Aegon for £140 million (€163.6 million) incurring a net loss of £65 million.
Aegon will also receive the UK firm’s investor portfolio service platform, which provides similar services to banks, as well as the retail and institutional businesses of Cofunds.
This is the third deal this year between the two firms, following L&G’s acquisition of Aegon's £2.9 billion back book annuity portfolio, and the five year distribution agreement to provide individual annuities to Aegon pension customers.
All employees of Cofunds and its investor portfolio service will be transitioned to Aegon.
, or “supermarkets” have fallen out of favour with independent financial advisers and discretionary fund managers in recent times, who favour fund wrappers that tend to offer more choice. Other fund supermarkets include Fidelity’s FundsNetwork and Old Mutual’s fund platform.
Cofunds had looked to be in trouble for some time, net flows for the first six months of 2015 were £1.1 billion, compared with £2.5 billion in the same period in 2014.
“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," said Mark Gregory, group chief financial officer at L&G.
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