Legal & General sells Cofunds platform to Aegon

Legal & General Group has agreed the sale of its Cofunds investment platform to Aegon for £140m.

The acquisition, which includes the Investor Portfolio Service (IPS) platform as well as Cofunds' retail and institutional business, will increase the Solvency II surplus by £125m and its economic capital surplus by £105m.

It follows L&G's purchase of Dutch-owned Aegon's £2.9bn back book annuity portfolio and the five-year distribution agreement to provide individual annuities to Aegon pension customers.

"Over the last few years Legal & General Investment Management (LGIM) has developed a market leading international defined contribution pension platform business," said chief financial officer Mark Gregory, explaining the rationale for the sale.

"LGIM manages £50bn 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."