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

Share tips of the week – 30 September
Share tips

Share tips of the week – 30 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
30 Sep 2022
The best British tech stocks from a thriving sector
Share tips

The best British tech stocks from a thriving sector

Move over, Silicon Valley. Over the past two decades the UK has become one of the main global hubs for tech start-ups. Matthew Partridge explains why,…
29 Sep 2022
These 3 top value stocks offer
Share tips

These 3 top value stocks offer

Professional investor Adam Rackley of Cape Wrath Capital highlights three overlooked value stocks to buy.
29 Sep 2022
Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022

Most Popular

Why everyone is over-reacting to the mini-Budget
Budget

Why everyone is over-reacting to the mini-Budget

Most analyses of the chancellor’s mini-Budget speech have failed to grasp its purpose and significance, says Max King
29 Sep 2022
How the end of cheap money could spark a house price crash
House prices

How the end of cheap money could spark a house price crash

Rock bottom interest rates drove property prices to unaffordable levels. But with rates set to climb and cheap money off the table, we could see house…
28 Sep 2022
Why UK firms should start buying French companies
UK stockmarkets

Why UK firms should start buying French companies

The French are on a buying spree, snapping up British companies. We should turn the tables, says Matthew Lynn, and start buying French companies. Here…
28 Sep 2022