L&G secures stake in Cofunds

Legal & General Group PLC
20 April 2005


STOCK EXCHANGE ANNOUNCEMENT

20th April 2005

              Legal & General reinforces commitment to fund choice
              ====================================================
                         by securing a stake in Cofunds
                         ==============================

Legal & General is reinforcing its commitment to the future of fund choice for
advice based sales in insurance bonds, unit trusts, ISAs and pensions, by
investing in the development of the Cofunds open architecture platform.

Subject to regulatory approval, Legal & General will be investing £18.6m which
will represent new capital in Cofunds and supplements that provided by the
firm's existing shareholders. The company will become Cofunds' largest 
shareholder and will be taking a seat on its Board. Shareholders have committed 
a further £7m in total to be drawn down by Cofunds as required.

Legal & General Group Director (Retail Distribution) Kate Avery said, 'This is a
strategic investment for Legal & General in the fund platform concept. In our
view, Cofunds represents the best fund and administration platform in the UK
independent intermediary market with over £4bn of funds under management. It is
one of the fastest growing platforms and one which is solely committed to
supporting the financial intermediaries who have just voted Cofunds Best Fund
Supermarket 2005 in the Financial Adviser Investment Awards.

'We believe the platform concept will be taken up by most advisers in the post
depolarisation intermediary market simply because it makes their businesses more
profitable, more valuable and easier to run - as the concept has done in the
USA.

'Cofunds' open architecture and consolidation model offers Legal & General - as
a multi-channel distributor - an important business to business solution for its
partners while providing a platform for its products.

'Given the future for platform development in the UK and its consequences for
our multi channel distribution strategy, we felt it important to take a stake in
the ownership of Cofunds. We are therefore delighted to add our backing and
commitment to Cofunds - a company backed by some of the leading brand names in
fund management, asset administration and insurance.'

Enquiries to:

Legal & General
---------------
Peter Horsman, Head of Investor Relations   Tel: [phone]   M: 07767 495929
John Morgan, Media Relations Director       Tel: [phone]   M: 07798 604951


Cofunds
-------
Mark Jones, Marketing & Development Director Tel: [phone]  M: 07710 038657
Richard Eats, Communications Consultant      Tel: [phone]  M: 07775 703176



Notes:

1. The shareholdings in Cofunds after Legal & General's purchase will be:-

   Company                 Ultimate Shareholder                % of Equity
   -------                 --------------------                -----------
   IFDS and BFDS           State Street and DST                    24
   Jupiter                 Commerzbank                             15
   Legal & General                                                 25
   M&G                     Prudential                               3
   New House Capital       Nationwide Insurance                    18
                           (Owner of Gartmore)
   Threadneedle            American Express                        15

2. The acquisition will be made by Legal & General Partnership Holdings Limited,
   using capital provided by Legal & General Group plc.

3. Cofunds Limited launched in 2001 and is the leading independent fund market 
   for intermediaries, with assets under administration in excess of £4 billion
   having doubled in size in just 12 months. Cofunds does not offer investment
   management or advice, nor does it compete with intermediaries by offering its
   services direct to the end client. Cofunds exists to serve the needs of 
   Intermediaries, their clients and Fund Managers. Through an alliance with 
   Legal & General, Cofunds will commence expansion into life and pension 
   products later in 2005.

4. Funds platforms are an increasing force in the UK and appear to be following
   the pattern experienced in the United States where according to Cerulli 
   Associates $800bn of funds are now held on platforms. The success of 
   platforms can be attributed to a number of factors including:

   • Significant administrative savings for intermediaries. These derive from, 
     for example, online valuations and transactional statements across
     investment funds and fund managers.
   • Leading organisations allow consolidation of investment funds onto their
     platforms and consolidated payment of commission and commission statements
     by the platform to intermediaries across fund managers.
   • The provision to intermediaries of the opportunity to improve customer
     service and advice. For example, having instant access to and a single view
     of clients investment portfolio combined with a range of tools to assist in
     research and portfolio planning.


Ends




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