KKR Buys Gen II Fund Services for $5.1bn

KKR has agreed to acquire Gen II Fund Services, a provider of administration services to private capital funds, in a transaction that values the business at $5.1bn. The acquisition is being made through KKR's Core Private Equity strategy, according to the announcement. The deal requires regulatory approval and the satisfaction of customary closing conditions, and is expected to complete in 2027.

Scale and Services

Gen II provides administration services to more than 275 investment managers with more than $2tn in assets. Its services also cover tax, compliance, treasury, and technology. That breadth positions the company at the operational center of private capital, where fund managers increasingly rely on third-party administrators for back-office and regulatory functions.

The transaction values Gen II at $5.1bn and is expected to complete in 2027, subject to regulatory approval.

Sellers and Leadership

Sellers include Hg, General Atlantic, and other minority shareholders. Gen II chief executive Steven Millner will continue to lead the company. KKR said it would work with the existing management team on Gen II's expansion in the US and overseas, as well as on extending its services across asset classes. The plans also include further investment in Gen II's proprietary technology and AI-based tools.

Employee Ownership

KKR intends to support the introduction of an employee ownership scheme under which all Gen II employees could take part in the company's future growth. The structure is consistent with KKR's stated approach of working with management teams while broadening participation in value creation.

Growth Record

Millner founded Gen II in 2009 with Steven Alecia and Norman Leben. General Atlantic and Hg jointly led an investment in the company in 2020. Since then, Gen II has increased its presence in the US and Europe, expanded its service range, and quadrupled revenue and EBITDA. The company's growth included four acquisitions.

KKR's Financial Services Portfolio

KKR has also invested in financial services companies including USI Insurance Services and Integrated Specialty Coverages. KKR has agreed to sell USI subject to closing conditions and exited ISC in 2025.

Millner said: "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."