The fund administration sector is an important element of the financial “plumbing” that wealth managers rely on. An international sector, it is one that KKR has already bought into. This week it agreed a deal to buy one of the largest organisations in the space.
KKR, the US private
markets giant, has acquired Gen II Fund Services, the funds
administration business serving more than 275 investment
managers representing over $2 trillion in assets.
The business is being bought from Hg, General Atlantic and other
minority investors via KKR’s core private equity strategy.
The Gen II Fund Services business was bought for $5.1 billion in
total enterprise value, KKR said in a statement.
The transaction, which is subject to customary closing conditions
and regulatory approvals, is expected to close in 2027, it
said. Simpson Thacher & Bartlett served as legal advisor to KKR.
Morgan Stanley, Robert W Baird and UBS Investment Bank acted as
financial advisors to the sellers, and Kirkland & Ellis acted as
legal advisor to the sellers.
Founded in 2009, Gen II Fund Services is led by Steven Millner,
chief executive.
KKR said it wants to work with the Gen II management team to
support its continued US and international growth as well as
implement a “broad-based employee ownership programme.”
The deal shows that private market investment houses such as
KKR view the fund administration and corporate services area as
significant financial assets, with an ability to generate fee
income. In April this year, for example, GTCR completed its
acquisition of Fiduciary Trust Company, a Boston-headquartered
group with about $34 billion of assets.
Leadership and expansion
Besides Millner, other Gen II founders are Steven Alecia and
Norman Leben. General Atlantic and Hg co-led an investment in Gen
II in 2020.
Since then, the company has expanded its US and European
footprint, broadened its offerings and quadrupled revenue and
earnings before interest, taxation, depreciation and amortisation
through organic growth and four strategic acquisitions:
Crestbridge (closed April 2024), Update Capital (March 2022),
Stone Pine Accounting Services (August 2021) and Quilvest
Luxembourg Services (completed December 2019).
“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,” Chris
Harrington, partner at KKR, said. “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.”
Justin von Simson, partner and Stefanie Raiola, director at Hg,
said: “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 GenV 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.”
KKR has invested in several financial services firms, most
recently in the case of USI Insurance Services, KKR
announced an agreement to sell subject to closing conditions, and
Integrated Specialty Coverages (ISC), which KKR exited in 2025.
KKR had AuM of $796 billion, as at 30 June 2026, rising by
16 per cent on from the same date a year before.