Standard Life eyes deal for wealth management platform of rival insurer Axa

STANDARD Life is said to have made a formal bid for Elevate, the wealth management platform of rival Axa, to boost its already fastgrowing wrap asset platform.

Reports said French insurer Axa was in talks to sell most of its life insurance and wealth management operations in two separate deals that could be worth £700 million.

The speculation adds to industry belief that the growth of platforms in the market will soon lead to a bout of consolidation, with Standard Life seen as among the stronger players.

In February, Standard reported a 22 per cent rise in assets on the platform to £25.5 billion, with record net inflows of £4.4bn, up by 27 per cent.

Last year, Standard’s head of wrap business David Tiller claimed advisers were “already beginning to place clients with those platforms they see as sustainable” and Standard believed the number of platforms in the market would halve over the next three years.

David Ferguson, founder of adviserowned platform Nucleus in Edinburgh, has commented that Elevate and Cofunds appeared to be up for sale with other bigname platforms struggling financially.

Axa launched Elevate in 2008, but was reported last September to be looking for a buyer.

Standard Life steadfastly declined to talk about the platform business yesterday. A spokeswoman said: “We don’t comment on market speculation.”

Standard’s shares were up more than four cent at 361.6p.

Analysts at JP Morgan, which has an “overweight” position on the shares, said such a deal would create an immediate return on equity for cash that would otherwise be idle.

In February, it was reported that Royal London was preparing an offer for Axa’s UK protection business.

The industry’s leading mutual, which runs its pensions and protection business from Edinburgh, may be bidding against over50s specialist SunLife.

JP Morgan has raised its rating on Axa shares, which jumped by over four per cent on the reports, from neutral to overweight, saying the proceeds would strengthen its capital ratio by around two percentage points.