Hg-backed Gen II Fund Services is exploring a sale that could value the fund administration specialist at around $6 billion, according to people familiar with the matter. The potential deal highlights the rising worth of firms that handle the back-office operations for investment funds as private capital markets continue to swell.
A Specialized Back-Office for Private Capital
Gen II provides accounting, reporting, and compliance services to private equity, venture capital, and hedge funds. With more money flowing into private markets, fund managers are increasingly outsourcing these functions to companies that can manage complex structures and cross-border regulations. That trend has turned fund administrators into prized assets for larger financial firms and investors.
Hg's Bet on Fund Services Pays Off
Hg, a private equity firm focused on software and services, backed Gen II in 2021. If the sale proceeds at the reported valuation, it would mark a strong return on that investment. Hg has a track record of building companies in financial technology and services before exiting at higher valuations.
Growing Demand in a Booming Market
Global private capital assets under management have surpassed $14 trillion, driving demand for support services. Administrators that can handle intricate fund structures and regulatory burdens are especially sought after. Gen II's potential sale is part of a broader wave of deals in the sector, signaling that investors expect continued expansion in private markets.
The company has not commented publicly on the sale process. In the coming months, Gen II and its advisors are expected to field interest from strategic buyers and other private equity firms.
