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Cofunds to remain with L&G for foreseeable future

Cofunds to remain with L&G for foreseeable future

Platform Cofunds’ £37.9bn retail business is unlikely to leave owner Legal & General in the near future, despite market speculation that a sale was on the cards.

According to an insider, discussions over an immediate sale of Cofunds are off the table for the time being.

When asked whether sale talks were no longer continuing, Richard King, press officer at L&G, said the company did not comment on speculation.

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In August this year, it was reported that AJ Bell and platform FNZ had both separately held talks with the provider, with AJ Bell reported to be in an exclusivity period at the beginning of September.

L&G bought Cofunds two years ago in a deal that valued it at £171m. According to its latest report and accounts for 2014, the platform has undergone business-wide cost-cutting, with a view to making £80m worth of savings this year.

In 2014, Cofunds posted a pre-tax profit of £7.7m, although net inflows halved from £10.1bn in 2013 to £5.4bn in 2014.

To the end of June 2015, there were £37.9bn of retail assets, and £36.7bn of institutional assets.

At the time, David Hobbs, chief executive of Cofunds, said: “There is still much work to be done as we recognise that a business of our scale should be generating more profit.”

Right to reply

Charlie Musson, spokesman for AJ Bell, said the firm did not comment on market speculation.

Stephen Wynne-Jones, head of marketing, digital savings for Cofunds, said: “We never comment on speculation such as this.”

simoney.kyriakou@ft.com

Additional reporting by Faizah Malik