AJ Bell and L&G abandon Cofunds deal

AJ Bell will not acquire Cofunds after the firm failed to reach a deal with the platform’s parent company Legal & General, Fundweb sister publication Money Marketing understands.

Last week, it was revealed AJ Bell and L&G were in exclusive talks over a possible acquisition.

However, a source close to the deal says the two parties have now decided not to press ahead after a four-week exclusivity period ended without agreement being reached.

The source says: “The exclusivity period has come to an end and the deal is not going to happen. It was a mutual decision, both parties just felt now is not the right time for a transaction to take place.”

AJ Bell, Cofunds and L&G declined to comment.

L&G purchased the remaining 75 per cent of Cofunds it did not already own for £131m in March 2013. The insurer took the initial 25 per cent stake in the platform in 2005.

In July, it was found the insurer’s decision to sell Cofunds was sparked by a move to replatform its technology to Bravura.

Cofunds is currently powered by IFDS and has been considering its options ahead of IFDS’ contract ending in 2017. It is understood Bravura’s new Sonata system had been selected to replace IFDS, but the costs associated with the move prompted L&G to begin the sale process.

The project to replatform Cofunds to Bravura is expected to cost tens of millions of pounds.