Gen II serves more than 12,000 private-capital fund entities
KKR said late Monday that it struck a deal to buy Gen II, a fund administrator that targets buyout and other types of private-capital funds, in a transaction that values the business at roughly $5 billion including debt. The Wall Street Journal previously reported on the deal. A deal could be announced imminently, the people said.
Gen II, which is based in New York, provides tax, compliance, and other back-office services that funds require to operate. The fintech serves more than 12,000 entities across private equity, private credit, infrastructure and real estate, according to its website.
KKR is buying the business from a group of investors led by buyout firms Hg, which focuses on software investments, and General Atlantic. The two first invested in Gen II in 2020, according to the Journal.
Fund administrators appeal to private-equity investors because of their reputation for generating steady and growing fee income, the Journal reported. Private-capital funds amassed huge sums of money in recent years as investors sought to reduce their reliance on public markets and boost returns. That growth has come with greater regulatory scrutiny and back-office outsourcing, driving demand for fund administration services.
KKR oversees roughly $796 billion in assets under management, of which $255 billion is dedicated to private-equity investments. The firm invests across industries, and Gen II “dovetails with its global portfolio of financial services investments in areas such as wealth management and insurance,” the Journal reported.
Terms of the deal beyond the roughly $5 billion enterprise value were not disclosed. Hg and General Atlantic, which led the 2020 investment in Gen II, will exit through the sale to KKR.