Legal & General to sell Cofunds at a loss

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. Fund platforms, 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. ©2016 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.