Legal & General acquires Cofunds Holdings

Legal & General, which provides insurance and investment services, has agreed to acquire a 75 per cent interest in UK fund platform Cofunds Holdings for 131m pounds.

Legal & General, which provides insurance and investment services, has agreed to acquire a 75 per cent interest in UK fund platform Cofunds Holdings for 131m pounds.

Cofunds will be paid for using Legal & General's existing cash resources and will boost the company's digital offering, identified as a key driver of growth.

Legal & General said the acquisition will provide the company with scale and distribution in the investment platform market where assets under administration (AuA) are forecast to double by 2017.

Cofunds, the UK's largest investment platform for financial services, has over £50bn of AuA and a share of 22% of the market.

The transaction is expected to be complete in the first half of this year and earnings accretive by the end of 2014.

Cofunds and investor portfolio service (IPS) will form a new business unit within the savings division.

The cost synergy benefit is anticipated to be £11m per annum from 2015, with a one-off investment cost of around £17m.

Cofunds will remain a separate brand in the UK investment platform market.

"As we said at our preliminary results, digital solutions is one of our five drivers of growth," said Legal & General's Chief Executive Officer of Savings, Mark Gregory.

"The projected growth in the investment platform market is substantial and we expect Cofunds to be a major beneficiary of this growth. Cofunds, alongside our existing platform IPS, provides us with the scale and capability to be a major player in this important and growing market."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
It's not just the UK – we're seeing pandemic housing booms across the globe
Property

It's not just the UK – we're seeing pandemic housing booms across the globe

Soaring house prices aren’t just a UK thing, they’re a worldwide phenomenon. And it’s no coincidence – the underlying cause is much the same. John Ste…
18 Jan 2021