Legal & General (L&G), a provider of insurance, savings and investment management products, is selling investment platform Cofunds to Aegon for £140 million, subject to regulatory approval.
The deal is expected to be completed in December 2016 and includes the investor portfolio services (IPS) platform as well as Cofunds' retail and institutional business.
The deal follows two other transactions between the two entities. L&G has acquired Aegon's £2.9 billion back book annuity portfolio. The insurers signed a 5 year distribution agreement under which L&G provides individual annuities to Aegon pension customers.
According to L&G, its Solvency II surplus as of June 30, 2016 was estimated at £5.3 billion, which the sale of Cofunds will increase by £125 million, and its economic capital surplus by £105 million.
Mark Gregory, group chief financial officer at L&G, said: “Over the last few years Legal & General Investment Management (LGIM) has developed a market leading international defined contribution pension platform business.
“LGIM manages £50 billion in UK and US defined contribution pension assets, and plans to expand into the DC market of Asia. Cofunds is at the point where it requires a significant upgrade in technology to exploit its leadership position in the UK platform market.
“We have concluded that this long term commitment is best achieved under Aegon’s ownership as a specialist wealth platform provider.”
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Legal & General, M&A, Cofunds, Aegon, Insurance, London, UK