Private equity firm KKR has agreed to acquire private capital fund administrator Gen II Fund Services in a transaction valuing the business at an enterprise value of $5.1bn (£3.84bn).
KKR is making the investment through its core private equity strategy, buying the business from private equity backers Hg, General Atlantic and other minority investors. Gen II chief executive Steven Millner will continue to lead the company alongside its existing management team.
Founded in 2009, Gen II provides fund administration, tax, compliance and technology services to more than 275 investment managers representing over $2tn in private fund capital. Since General Atlantic and Hg co-led an investment in the business in 2020, Gen II has quadrupled revenue and EBITDA through organic expansion and four strategic acquisitions.
The deal is expected to close in 2027, subject to regulatory approvals, the companies said. Simpson Thacher and Bartlett acted as legal adviser to KKR, while Morgan Stanley, Robert W Baird and UBS Investment Bank served as financial advisers to the sellers.
Chris Harrington, partner at KKR, said: “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.”
Steven Millner, chief executive of Gen II, said: “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.”
Hg partner Justin von Simson said: “Gen II has become one of the most respected platforms in private capital administration, and we’re proud of the role we played alongside management and General Atlantic. KKR is a natural home for Gen II’s next chapter, and we wish the team every success.”
Aaron Goldman, managing director at General Atlantic, said: “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. 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.”
