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. Yesterday, it agreed a deal to buy one of the largest organizations 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 yesterday.

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 program.”

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 amortization 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, 30 June 2026, rising by 16 per cent on from the same date a year before.