Cofunds has been valued at £175m, and will remain a separate brand in the UK platform market. It is currently the largest investment platform for financial services and it has over £50bn of assets under advisement and a 22% share of the UK platform market.
L&G has owned 25% of the platform since 2005, while the remaining ownership was split between IFDS Group (24%), Threadneedle (20%), Newhouse Capital Partners (18%), Jupiter (10%) and Prudential (3%).
Threadneedle released a statement following the announcement: "Threadneedle confirms that it has agreed to sell its stake in Cofunds to L&G. As a founding shareholder of Cofunds we have seen the fund platform grow to become the largest independent platform for financial services in the UK. It is now the right time for Cofunds to be taken forward by a single owner."
Jupiter and IFDS Group had no comment.
L&G’s plans
The move will allow L&G to build on its presence in the intermediary market, while providing it with scale and distribution capabilities in the investment platform market. The firm identified digital solutions as one of its five key drivers of growth in its preliminary results.
Cofunds will remain a whole of market platform for both retail and institutional investors, and the deal is expected to be completed by the end of H1 2013.
Cofunds and Investor Portfolio Service (IPS) will form a new business within the savings division, and there will be a one-off investment cost of £17m, L&G said.
Mark Gregory, CEO of savings at L&G, said: “As we said at our preliminary results, digital solutions is one of our five drivers of growth. 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.”
The deal is subject to regulatory approval and is expected to go through by June.
Cofunds chairman Charlie Eppinger, said: "Legal & General’s decision to acquire the remaining 75% of the business is a welcome one and marks the start of an exciting new chapter in the future growth and development of the Cofunds proposition. The consortium ownership has served Cofunds extremely well for a long time, providing market knowledge, know-how and capital, however the platform needs to move to the next stage and it will greatly benefit from the focus of a single shareholder with a long-term commitment to the UK market."
