“You don’t get to be a CEO for as long as he has, without being supremely efficient at what you do.”
Seeking scale
What Aegon has achieved in Mr Grace’s time, particularly with its purchase of Cofunds, is scale.
The acquisition has made it the largest platform in the UK, with nearly £140bn in assets under management.
Mr Grace has previously said: “It’s about scale in every business and if you don’t do it you will fail.”
Scale is important. The bigger your asset base, the more a company can spread its services.
If you need 10 people to run a platform with £10m, you do not need 20 people to run one with £20m.
Mr Mann adds: “Scale brings you efficiency because there is no direct do-relation between asset scale and resource allocation.”
But with Cofunds, for all its size, it was seen as a problem child.
Speaking to FTAdviser in 2016, Clive Bootham who was chief executive of Cofunds between 2002 and 2003, heralded Aegon’s acquisition as a good move, but warned about data integrity issues.
When the transaction was completed in January 2017, Cofunds was bought at a discount of £140m.
For Aegon, the acquisition activity looks likely to continue.
Back in July it wasreported that Zurich was contemplating the sale of its adviser platform and that Aegon was the rumoured buyer.
Aegon has neither confirmed or denied this, but Mr Grace told FTAdviser at the time that if an opportunity presented itself the company would look into it to see whether it would make strategic sense.
Regulation has dominated the landscape over the past 10 years, with pensions freedoms, the Retail Distribution Review and Mifid II, among other changes, making it somewhat more challenging for companies to innovate as quickly as they would like to.
As that onslaught of regulatory change appears to be calming down, for all that might be said of Mr Grace, he would want to feel he has set Aegon up for the future.
Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser.com
