KKR has agreed to acquire Gen II Fund Services from Hg, General Atlantic, and other minority investors in a transaction valuing the private capital fund administrator at $5.1 billion.
KKR is making the acquisition through its Core Private Equity strategy.
Gen II CEO and co-founder Steven Millner and the company’s existing leadership team will remain in place following the transaction.
Founded in 2009 by Millner, Steven Alecia and Norman Leben, Gen II provides technology-enabled fund administration and related services to private market investment managers.
The company serves more than 275 investment managers representing more than $2 trillion in assets.
Its broader platform includes tax, compliance, treasury and technology-enabled services designed for private equity, private credit, infrastructure, real assets and other private capital strategies.
KKR plans to work with Gen II to expand the company in the U.S. and internationally, broaden its capabilities across asset classes and services and invest further in proprietary technology and AI-enabled solutions.
KKR also intends to establish a broad-based employee ownership program that will give Gen II employees an opportunity to participate in the company’s future growth.
Hg and General Atlantic co-led an investment in Gen II in 2020.
During the following six years, Gen II expanded its U.S. and European presence, broadened its product portfolio and completed four strategic acquisitions.
Revenue and EBITDA increased approximately fourfold over that period through a combination of organic growth and acquisitions.
Hg also worked with Gen II on development of its Digital Solutions offering, including the GenVū client portal, and on the use of AI and automation in areas including customer onboarding and bank reconciliations.
KKR sees continued structural growth in private markets as creating additional demand for scaled fund administrators capable of handling increasingly complex fund structures, investor requirements and regulation.
The investment firm has experience across financial services through investments including USI Insurance Services and Integrated Specialty Coverages.
The transaction is expected to close in 2027, subject to regulatory approvals and customary closing conditions.
Simpson Thacher & Bartlett is serving as legal adviser to KKR.
Morgan Stanley, Robert W. Baird and UBS Investment Bank are acting as financial advisers to the sellers, with Kirkland & Ellis serving as legal adviser.
KEY QUOTES:
“Gen II is exactly the type of financial services business we look for – a sophisticated sector leader with exceptional client relationships and a differentiated service model. The company has become the gold standard in fund administration through its white-glove service model and founder-led culture and is well positioned to benefit from the structural growth of private markets. We see significant opportunity to support the team as they expand globally and deepen their capabilities.”
Chris Harrington, Partner at KKR
“At Gen II, our mission is to provide private markets managers with industry-leading fund administration delivered with unmatched client service and responsiveness. KKR’s ownership culture and long-term approach align perfectly with our vision for the future. Their resources and expertise will help our exceptional team capture the significant opportunities ahead to accelerate growth and continue to be at the forefront of our industry to serve our clients.”
Steven Millner, Co-Founder and CEO of Gen II
“Gen II has become one of the most respected platforms in private capital administration, and we’re proud of the role we’ve played alongside management and General Atlantic. Together we built a leadership team equipped to run a much larger, global business, and partnered on four acquisitions that took Gen II into new sectors, asset classes and services. Our value creation team worked closely with the business on its commercial strategy and the build-out of its Digital Solutions suite, including the launch of its GenVū client portal. We also drove AI and automation across client onboarding and bank reconciliations, capabilities now led by Gen II’s own team. KKR is a natural home for Gen II’s next chapter, and we wish the team every success.”
Justin von Simson, Partner at Hg, and Stefanie Raiola, Director at Hg
“In Gen II, we saw a business with deep client relationships, an ambitious team and a culture of innovation and growth. Over the past six years, together with Hg, we have partnered closely with Steve and the management team to develop Gen II from a founder-led partnership into a true global platform. We have worked alongside the team on transformative strategic acquisitions that expanded Gen II’s international footprint and broadened its service offering, invested in product and technology advancements and opened our network to introduce new managers to the business. Today, Gen II is a trusted partner to many of the world’s largest GPs, and we look forward to seeing the team build on this progress as the company enters its next phase of growth with KKR.”
Aaron Goldman, Managing Director and Global Head of Enterprise Technology at General Atlantic, and Caroline Woodworth, Managing Director and Head of Financial Services for EMEA at General Atlantic
