KKR agrees to buy fund administrator Gen II Fund Services in $5.1 billion deal

KKR said on Monday, October 5, that it has agreed to buy Gen II Fund Services, which provides fund administration for private capital managers, in a deal valuing the company at $5.1 billion including debt. The sellers are Hg, General Atlantic and other minority investors, and the acquisition is being made through KKR's Core Private Equity strategy, which holds businesses for longer periods than its traditional buyout funds. Closing is expected in 2027.

Gen II serves more than 275 fund managers with over $2 trillion in assets, and its chief executive, Steven Millner, will remain in place. Hg and General Atlantic co-led an investment in the company in 2020, a period during which Gen II quadrupled its revenue and EBITDA, according to the announcement. HgCapital Trust, one of the selling shareholders, said it expects about GBP 71 million for its stake, GBP 18 million or 34% above the GBP 53 million carrying value in its August 31 net asset value, a gain for that trust rather than a premium disclosed on the overall deal.

The purchase extends KKR's push into services that sit underneath the private markets industry, following its roughly $1.4 billion acquisition of Arctos earlier this year. Fund administration is a recurring-fee business that grows with the number of private funds and the assets they manage, which makes it a fit for a long-hold strategy.

What to watch: regulatory approvals ahead of the expected 2027 close, and whether other private-markets service providers attract similar bids as large asset managers look for recurring revenue.