Aegon closes in on Cofunds deal

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Aegon has reached a verbal agreement on a deal to purchase L&G-owned platform Cofunds, Money Marketing understands.

In addition, it is understood Capita and platform technology provider Bravura are working on their own joint bid for Cofunds.

The move follows months of speculation over the platform, which in September last year Money Marketing revealed had turned down a bid from AJ Bell.

A source close to the situation says Aegon’s offer is “significantly better” than AJ Bell’s.

Aegon has been vocal about repositioning towards its platform business, with Money Marketing revealing last week the provider was cutting sales staff on its legacy book by 30 per cent.

In July 2015, Money Marketing revealed the Cofunds sale was sparked by a decision to replatform its technology to Bravura.

Cofunds is currently powered by IFDS and has been considering its options ahead of IFDS’ contract ending in 2017. It is understood Bravura’s new Sonata system had been selected to replace IFDS, but the costs associated with the move prompted L&G to begin the sale process.

The project to replatform Cofunds to Bravura is expected to cost tens of millions of pounds.

One of the options discussed by AJ Bell and L&G was splitting up Cofunds into retail, institutional and direct-to-consumer divisions.

L&G’s interim results – published in August – show Cofunds’ assets are split roughly in half. At the end of June 2015, there were £37.9bn of retail assets, and £36.7bn of institutional assets.

L&G bought the portion of Cofunds it did not already own in 2013 for £131m.

Aegon, L&G, Capita and Bravura declined to comment.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. I hope Cofunds’ customer service values rub off on Aegon and not vice versa

  2. It would seem that every bidder so far have the same things in common:
    Lousy customer service and gold medal levels of incompetence

  3. I must admit my first reaction to the news that Aegon and Capita were competing for this purchase was something about “..devil and the deep blue sea..”
    Clearly all of us have had similar experiences

  4. One might also wonder why, if L&G want to get shot of it, what the bidders see in it that L&G doesn’t.
    I for one would be fascinated in the rational from seller and buyer.

  5. If ever there was a reason to move clients away from Cofunds, this is it!!

  6. Headlines/stories like this really don’t do my anxiety complaint any favours at all!

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