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AJ Bell and L&G abandon Cofunds deal


AJ Bell will not acquire Cofunds after the firm failed to reach a deal with the platform’s parent company Legal & General, Money Marketing understands.

Last week, Money Marketing revealed AJ Bell and L&G were in exclusive talks over a possible acquisition.

However, a source close to the deal says the two parties have now decided not to press ahead after a four-week exclusivity period ended without agreement being reached.

The source says: “The exclusivity period has come to an end and the deal is not going to happen. It was a mutual decision, both parties just felt now is not the right time for a transaction to take place.”

AJ Bell, Cofunds and L&G declined to comment.

L&G purchased the remaining 75 per cent of Cofunds it did not already own for £131m in March 2013. The insurer took the initial 25 per cent stake in the platform in 2005.

In July, Money Marketing revealed the insurer’s decision to sell Cofunds was sparked by a move 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.



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Phew – I consider that good news. Now let’s hope for a management buyout.

    • I suspect the figures just didn’t add up for either party, but that is where L&G are going to struggle to find anyone willing to pay to acquire Cofunds when you look at the typical real cost of re-platforming to new technology, and the level of net profit Cofunds are generating. The AUM I’m sure would be nice for many a provider, certainly those who are aiming for vertical integration and can then push their investment funds as well, but only really tells a part of the story.

      Very interested to see where it goes from here!

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