Hg, General Atlantic back Gen II

General Atlantic and Hg have invested in Gen II Fund Services, alongside minority investor IHS Markit. 

Following the investment, growth investor Cobepa will continue to hold a minority position, while the founders and management team will retain a ‘significant investment’. 

Gen II was set up in 2009 by Steven Millner, Steven Alecia and Norman Leben. It exclusively focuses on the alternative asset fund administration services. The company is headquartered in New York and administers $375bn of private capital, across 500 funds. 

“We are excited to partner with General Atlantic, Hg and IHS Markit to make Gen II even stronger,” commented the firm’s founders, Millner, Alecia and Leben. “Our new investors each bring game-changing expertise to our firm and our clients. General Atlantic brings 40 years of global growth equity investing and will be superb advisors as we expand our capabilities and reach. Hg, the largest software investor in Europe, brings deep software and service business intelligence that we will leverage to help refine our products. And IHS Markit, developers of WSO Software and iLevel, brings technology, analytics, and product expertise that will help us transform the features and performance of our platform. This is a powerhouse combination.”

In July 2019, Gen II purchased Quilvest Luxembourg Fund Services, to gain a foothold in the key European market. The Drawdown spoke to Gen II founder Leban, who said: 

“We have clients that have raised funds in Europe, and who will continue to do so. Given the European regulatory regime, namely AIFMD, we wanted to be in a position to service not just the domestic needs of our clients, but also their European service requirements.” 

When quizzed about how the deal stacks up against how Gen II’s peers have been using the M&A market recently – essentially buying up fund administrators in order to boost revenue and client numbers – Leben responded: “We have the leading reputation in the US, to date all of our growth has been organic; we execute at the highest levels. We felt that the right strategy was to be less focused on financial engineering, and more focused on finding a quality platform that we can enhance to best service our clients’ needs.”

Gen II joins a growing list of private equity-backed fund administrators; Alter Domus is owned by Permira; Ocorian by Inflexion; IQ-EQ by Astorg; and Apex by Genstar Capital to name a few. For more on the impact of private equity’s ownership of fund administrators, read our analysis here. 

https://the-drawdown.com/article/are-you-being-served