26 Mar L&G acquires Cofunds
After months, if not years of rumour, L&G has finally acquired the Cofunds platform. The insurance company was one of six shareholders that first came together to challenge Fidelity in the supermarket world more than 12 years ago. Since then, Cofunds has grown to assets of more than £50bn and is the leading platform in the market by AUA. It grew and became part of the established platform industry, losing its newcomer, cutting-edge status in the process. Which may well be why the other five stakeholders were willing to sell to L&G — that and the fact that running a platform business is very expensive.
For L&G the move makes sense. It’ was one of the last insurance companies to make its move in the fund distribution arena. For Cofunds, it makes sense too or at least it does on paper. Having six shareholders was pulling Cofunds in different directions and while the six had been ‘passionate’ supporters in the early days and served their purpose well, the structure was less easy to manage with a fully fledged, grown-up platform.
But what does it really mean for Cofunds? Both L&G and Cofunds have been quick to point out that it’s BAU (business as usual) for Cofunds and there are no changes on the horizon. Umbrellas won’t suddenly appear in the Cofunds logo, etc. But there will be some change. There always is, even if it’s internal stuff such as getting budgets approved or having to fit in with a new reporting structure. More important is how the change in ownership is viewed by Cofunds’ army of advisers and other strategic partners. One or two might jump ship because of the L&G (the few who like to troll on Citywire), but I suspect that the vast majority will simply shrug it off and move on. BAU.