Aegon UK could be set to benefit from a “game-changing” economy of scale, with a potential acquisition of the Cofunds platform, a market commentator has said.
According to latest market speculation, the Legal & General-owned platform is set to end up in the hands of the Dutch-owned Aegon UK, which is headquartered in Edinburgh.
An industry source close to the negotiations has claimed that the deal was signed and sealed two weeks ago, although neither company has confirmed this.
Platform specialist Mark Polson, founder and principal of consultancy The Lang Cat, said: “Although nobody knows anything yet, this could be a very major step for Aegon UK. First of all, platforms are a scale game and Cofunds is enormous. With one stroke, Aegon UK could become the biggest platform provider in the UK.
“It would be a game changer – a massive explosion in platform assets for them, as well as vastly interesting for the industry.”
Aegon UK has already developed the at-retirement platform Arc, which it launched at the end of 2012, followed by the Retiready retirement plan in April 2014.
According to the latest figures, Arc saw high levels of growth in 2015, with total assets accelerating to £5.3bn by year end.
Mr Polson added that Cofunds’ book of business is quite disparate in structure, with institutional, retail (direct to consumer), white-label and advised.
“It is clear how the advised business would fit into Aegon UK’s model, and you could see how the retail D2C would work, although the institutional and the white-label would be a different matter.
When asked whether Aegon UK was the front-runner in a sales process, Stephen Wynne-Jones, head of marketing and digital at L&G, said: “We do not comment on market speculation”.
A spokesman for Aegon UK agreed and said: “This is market speculation and we would not comment on it.”
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